Hi guys and girls,
No one gets un-affected when there is a stampede to cash. Some are trampled to death while others just get bruised. Bruises heal and disappear in a short while. RAP has copped a bruising.
Fundamentally, the Brexit does not have an ounce of impact on the success of RAP. We are not connected or dependant on the demand for commodities. In fact, the tighter things get out there in the world; the more attractive a low cost diagnosis tool becomes.
There is so much inter-connectedness in the markets, that it is hard (and foolish) to put the blame on one factor.
From the surface, one could be expected to ask; " The Brits already had their own currency, so they don't impact the Euro in that manner, the fact that they will now need passports (an inefficiency but so what?) to enter Europe shouldn't cripple a non Brit, the Brits are now free from the Political Correctness pushed onto them from Brussels, yes trade agreements need re negotiating.... but really...why the international fuss?".
A fair question. Again there are many reasons. I'll suggest a few:
One; Central banks are very sour at the Brexit result. Strings are attached to Euro zone membership. The European Central Bank and the Eurozone are incredibly intertwined. So they aren't happy. To 'centralise' is to have power, de-centralization 'i.e. 'Br-exit' is their game plan gone horribly wrong. Predictably their reasons are vague, but their threats are strong. I mentioned this a day or two ago. I have been keeping my eye open specifically for Central Bank feedback on the result and sure enough; nice old Alan Greenspan (former Federal Reserve chief) come out the say 'the problem' looks much worse than the lead up to the 23% one day fall in '87. What is he trying to do?
Its hard to tell, but I never rule out the fact that they have the power to create waves in the market purely out of spite, in order to discourage others countries from following suit. Both France and Germany have had a gut full, and the Czech's have already indicated that they are next in line for a referendum. The wheels seem to be falling off the EU cart.
Secondly, the media has greatly added to the fear and loathing of the Brexit.
Thirdly, there is the age old, fragile dimension to the market; margin loans, gearing and such like which exaggerates the problem when the dominos begin to fall. If everyone invested within their means the market reaction would look a lot different.
Fourthly, with populism on the rise, there is a growing suspicion of the supposed invisible and nameless elite. (Of course much of this is unjustified and is especially prominent amongst people who are looking to blame everyone, except themselves for their life failures.) The Brexit is symptomatic of populism, and that causes unease amongst onlookers: It is one thing to see people rise against 'the system', but it is quite another thing whether or not they come up with a better solution. The lack of a better solution and the rise of anarchy, sadly leaves many without hope. Oddly, people never seem to look back to take a lesson from periods in history where things actually ran well (at least much better than now), and where people were generally happier. Apparently that is a step backwards.
BACK TO RAP:
We definitely are not looking to raise cash; we are loaded for quite some time and our cash burn is minimal. This alone makes Rap a very attractive stock when the Brexit dust settles. All those that took cash off the table and emptied their portfolios, will be looking for stocks like RAP; stocks which are cashed up, de risked and close to producing revenue.
Though there is no fundamental flaw in RAP that we are aware of, the reality is that there is a flight to cash in every 'crisis'. As far as I am concerned, the crisis begins where the Central Banks and EuroZone cry "WOLF!" and the sheep start a stampede.
I can understand that short term traders don't waste time to point out that there is no wolf; they get the heck out of the way before they get trampled. And that involves getting money off the table indiscriminately. I mentioned recently how I observed in 2008, after the massive sell-off, I saw some very stable blue chip stocks get insanely over-sold. One in particular was over sold to a point where it was trading at ~50cents even though it was scheduled to pay out a 30cent dividend the following week! Naturally it didn't take too long for that stock to bounce back.
As horrible as it is to see the market get smashed, it actually has a cleansing effect. Everything gets temporarily suppressed, and only the healthy stocks spring back. The unfortunate collatoral occurs when stocks with great ideas or oppurtunites can't raise cash, because the cash holders are still shell shocked and reluctant to leave the sidelines.
Therefore it is an absolute blessing that RAP managed to raise $12mill at 20 cents. Doesn't look so stupid anymore does it now? With hindsight we should realise that if we waited till after Brexit we would have been held over a a barrel and diluted ruthlessly while simultaneously being told, with a surpressed smirk, ' The Brexit makes it too risky to come in higher'.
We are cashed up. No-one can hold us over a barrel. The stampede may continue, and some 'high flyers' may gloat at the opportunity that gives, but common sense prevails in the long run.
That short term $20+ million revenue target might come into play (some time this year?- maybe sooner than later?). When it does, it will represent a triumphant arrival of the calvary as then we will have full justification to have fundamental support line bolstering the SP at multiples of the current share price. Remember, that is just the 'charity/WHO' part of the business. Ho ho ho!
The other 99% of the potential is going to be far more disruptive to both the medical world and the share price.
Don't forget that.
Cheers
CT
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