Consolidation thread 2

I would like to try again minus my opinion at the end of the post.

I've been looking at RGX...the minimum consolidation is set at 22:1 and listing price set at 20c. That means they can increase the ratio to 40:1? If the SP was trading at 0.005 at the time of suspension prior to re listing, a 40:1 consolidation would take place, taking them to the 20c listing price. Red Gum share holders would hold 20.8m post consolidated shares. The travel Coy's to be acquired are receiving post consolidated shares so they will benefit from a bigger consolidation number. The bigger the number, the less shares allocated to Red Gum share holders and the bigger percentage of the consolidated register the travel coy's hold.

Minimum 22:1 means even if the SP was trading at 1.5c they will still be consolidated at 0.009 or 22:1.

On this same 40:1 consolidation basis RGXOA's purchased at 0.001 would have a post consolidation cost base of 4c and the 0.002 purchases becomes 8c. The option exercise price would also consolidate from 1c to 40c. Therefore, you would need an expectation that the SP could trade between 44-48c to break even on the current oppies. Having an expiry of Nov 17 gives a reasonable amount of time for the market to apply a time value on the options but obviously, the business would need to grow before any intrinsic value could be added. The small number of consolidated options (4.4m) would make them pretty illiquid, imo.

We don't know how salable the individual travel Coy's would be if placed on the market given their small market share. If private investors from either of the acquired travel Coy's are looking for an exit, they may see this listing as a way to recoup funds by selling their shares as soon as it lists? If the SP of the consolidated business grows from gains made through the various synergies and increases it's share of the travel market, there could be longer term gains to be made but the business would need grow substantially for the options to be a good play.

Dis: None of what I have said is financial advice. These are purely my musings and should be read as such.