Agreed with your logic. The only points I would add: a) Timing of the listing is always in Favour of the issuer. ie they pick their IPO timing. Some degree of comfort is by looking at retained earnings and initial seed capital in the underlying company balance sheet. b) I am more worried than you on FY24 earnings, given I think there will be a flow through to 1HFY24 earnings. c) Given all of the above, one needs to look at underlying capital at risk. And for this I am not talking about share price, I am talking about the underlying company risk. I like buying straw hats in winter, I might not get the timing right as to price paid, but I want my capital intact relative to the underlying investment of future cash flows. Those future cash flows (simplistically speaking future dividends) provide a return of my capital. d) With reference to (c) the good news, the underlying company is at least at this point in time, conservatively managed from an owner investor point of view. The bad news, we don't know the severity to which consumer behavior will impact in future spending. And DSK has large leasehold exposure (but without excessive borrowing). We do know now, that DSK as first kid out of the block, is updating that consumer spending is under performing at least in regards to DSK.
Return on my capital, return of my capital. These are always my thoughts.
DSK Price at posting:
$1.23 Sentiment: None Disclosure: Held
ie they pick their IPO timing. Some degree of comfort is by looking at retained earnings and initial seed capital in the underlying company balance sheet.
