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0.7¢ halo food co. limited

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elzephyrus

5,505 Posts.

326

06/09/22

10:50

Post #: 63538666
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Originally posted by RedRocket005: ↑

Depends how you look at it.
The capital raising to buy Omniblend was done at .43c, which means if you buy HLF shares on market today at .05c, then you are purchasing Omniblend at 11.6% of it's original value, or $2.5m in total.

IMO - was Omniblend overvalued at the time of acquisition. Maybe, maybe not. I believe HLF paid a fuller valuation compared to the bargain THM. However, I believe the original KTD was well overvalued having only $2m in revenues at the time, which coupled with the ex founders dumping has led to the demise of the share price.

Going back to today, would I pay $2.5m for an entity which produced $3.3m EBITDA in contract manufacturing last FY? I definitely would ! Which is why there is so much opportunity in todays share price.

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Yes, I agree in hindsight that today's purchase price (in shares) makes it much more reasonable, but tell that to the shareholders who subscribed for shares to pay for the cash component. At the time they paid way too much. I have no doubt about that. There has also been more dilution along the way and you could make the same argument for THM, yet here we are at near all time lows.

Last edited by elzephyrus: 06/09/22

HLF Price at posting: 5.1¢ Sentiment: Hold Disclosure: Held
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