The $1 target is based on a potential end game acquisition (refer to the figure above). It is merely a function of revenue multiple x run-rate. A $1 share price is achievable with a 7x revenue multiple at a run-rate revenue of $50m USD. There is a chance that it will happen and there is, of course, a chance that it will not. For what it is worth, CLB's chairman thinks $1 is actually undershooting the mark. The timing of such an outcome is of course uncertain.
I remain bullish on the prospects of the company and my decision to exit was made for a variety of reasons, many of them personal. I am also generally concerned about valuations in the share market as a whole right now, particularly the NASDAQ, as evidenced by market cap to GDP ratio, the Shiller PE ratio etc. and have consequently made a rational decision to increase my percentage cash holding at this point in time. This has naturally required reducing position sizes and exiting some positions.
For what it is worth, I find it odd that so much of the conversation focuses on myself. This forum should be used to discuss the investment thesis (both risks and opportunities) of Candy Club. I am merely one investor here among a sea of individuals who all sit somewhere on a spectrum of bullish to bearish views. I could have easily just left the forum and not told investors that I had sold, yet I chose to be transparent.
Everyone here is an adult and needs to undertake their own investment decisions and take responsibility for it. For example, Lollies' theoretical "short" on CLB that he initiated at 12c (in principle according to HC sentiment) is now deeply in the red. He and only he is responsible for such a poor investment decision. In a different world, had the share price instead fallen from 12c, and my investment thesis broke, I, personally, would be solely responsible for my decision. It is as simple as that.
I would never invest in a stock that I personally did not believe in the investment thesis of and I always do my best to provide objective, truthful, research-based views. Often I am right (i.e. CLB) and sometimes I am wrong; that's life. All I am aiming to do is to become a better investor with every year that passes. My research is always done with the best intentions of explaining my own investment thesis and to provide an overview of the opportunity (and the risk involved) from a research perspective, such that it can be put up for debate... and debated it was indeed.
Debate should be welcomed if it focuses on the stock - I actually enjoyed reading some of the Lollies v Everyone-Else debates. When Lollies isn't throwing mud, occasionally he provides something of value. Thank you to everyone who contributed insightful analysis that pushed the conversation forward and deepened our collective understanding of this opportunity.
I'm personally surprised that my exit has had the reaction that it has - one should always be free to buy and sell, at will, on the sharemarket; buying a stock is not a promise to hold indefinitely. The only way to eventually make a real-world profit is to eventually sell. You can't hold a stock forever if you are seeking a capital gain. Everyone has different financial goals and requirements at different stages of their life.
P.S. If you look at volumes over the past few weeks, the majority of CLB buying and the price surge has been driven by the chairman of Candy Club. Not me nor any other retail investor who has been reading these threads.
All the best,
T.E.P.
CLB Price at posting:
19.0¢ Sentiment: Hold Disclosure: Not Held
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