i was looking forward to the ‘golden cross over’ mate. For once...

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Elmacho

416 Posts.

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14/02/22

09:59

Post #: 59547954
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Originally posted by T.E.P.: ↑

Capital raise for a material acquisition!

If done well, it will be a massive positive catalyst for the group. But, in my opinion, it needs to be a) earnings accretive or b) enable them to build out more capacity (facilities) at a reasonable price. B could be even more important than A.

The growth trajectory of HLF was already steep ($96M AUD run-rate based on Nov 2021 sales of $8M AUD alone) and now with this too, a path is being charted to much greater heights. The level of ambition here is very high in terms of the scale of business that is being built and I'm all for that.

If done right, this will be a huge catalyst for the business. Despite some failed acquisitions historically (Supercupes), I have confidence in Jourdan with his IB background at Greenhill & Co (and their lessons learnt) that this will be a worthy acquisition.

My slightly cynical view is that this could also be a way of getting the new management team shares cheaply as well before riding the uptrend back up. They know the dynamic unfolding here and the massive upside potential from sub $40M MC levels. They also know that the share price has been held down by VC/JG selling and that this dynamic is about to reverse.

My guess is that the placement will take place at 12c, and that the target will take a mix of cash and shares. The share price will subsequently find support at 12c levels and then we may see this acquisition draw further interest from afield which could be the catalyst we need for more volume and attention on the stock leading to share price growth.

I'm excited by this. Let's see how it unfolds.

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i was looking forward to the ‘golden cross over’ mate. For once the technicals and the fundamentals were shaping up in the positive direction. there was a good potential to pole through 13.5…. But now what fresh hell is this. This is my 3rd CR with KTD/HLF to know well the guise of cash raised on the back of acquisition is a drag for another 2 years. Sincerely hope this one will not be bonkers like the last 2 CRs.

HLF Price at posting: 13.0¢ Sentiment: Buy Disclosure: Held
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