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GARETH78

8,391 Posts.

2981

22/06/22

18:34

Post #: 62144376
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Originally posted by Red Baron: ↑

Of course the market prices in FFX's holding in Leo. I think Dazaliam's original post was a bit tongue in cheek. Just because LLL shows as no value in our portfolios doesn't mean the market waits for it to list to then attribute the value of that 20%.

Having said that, the market is probably a bit unsure of how much value to attribute to that Leo holding. We had an oversubscribed IPO at 70c, however the market has dropped since then. It would depend on how much of a discount that 70 cent share price incorporated, and how much has the market dropped since. Also how many holders want to exit/profit take vs how many buyers want to get in, will have a big impact on Leo's SP.

Once Leo lists the market will have a better idea of how much value to assign to FFX's Leo holding. Do not, however, expect the market to assign the full 20% value to FFX's SP. There are many listed companies that hold a valuable shareholding in another company. My experience is this holding can be discounted by as much as 50%. So at IPO price Leo is worth 14c a share to FFX, don't be surprised if the market only assigns 7c to FFX for it's Leo holding.

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Agree on the discounted nature of holding shares in other companies on your balance sheet.

Also they are in escrow, so there only value is as equity for loan etc under limited circumstances.

No dividends from Leo for a long time. Read the Prospectus folks, it’s clearly stated what the dividend policy is.

The true value is in:

a) a takeover, they can be sold in that instance as per the prospectus
b) much closer to the end of escrow, the SP should start to recognise as this can be used for capital to buy assets, expand without borrowing.

IMO.

GLTAH for tomorrow

FFX Price at posting: 23.5¢ Sentiment: Buy Disclosure: Held
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