That doesn't make sense one fat lady...the number of shares and price DETERMINS the market cap ( plus you can start figuring options etc), definatley need to buy a book on fundamental analysis.
And it wont be a small company anyway, as i think thats what you are hinting. PEople Telecom will have about 18 times the revenue of just SWT, but number of shares on issue only goes up by 2/3 by my rough calculations.
That means, you get a lot lot bigger company for a proportional much smaller issue of capital.
Thast good news by itself. I think the best part of it is the diversification. Before we had an ADSL player who have been extremely succcessful in their growth, i think amazing if you look at the figures and where they came from. But it was always goign to be critisized as ADSL evolves and various threats emerge. Now it has branched out, will provide complete telecommunications solutions, has a good customer base of corporate customers..all up its just a more attractive package for instos etc.
I think SWT was an obvious buy when capitalized at just $18 million. Now, when it gets re-named People Telecom, it will be re-rated as bigegr investors start to get a grab.
The difficult part is this listing before the merger. There will be investors who have worked out what is a fair value for the shares, and there will be tricks and games to get these shares at less than the fair value. So holding is the only strategy, although may miss out on some over swings.
