Australia's largest stock trading and investment forum Australia's #1 stock forum

GMC

Click for more information

0.00%

0.6¢ gulf manganese corporation limited

So what you’re trying to say is when two companies have the...

First 19 Last

Share
Profile

Follow
Deano65

108 Posts.

11

28/06/18

12:37

Post #: 34007730
Share

Originally posted by tt2000 ↑

I really shouldn't need to explain this one, but I will

Do you want to buy shares with a high business value or low business value?

Take the example, that there are two companies with the same asset.
Business A is valued at $100M based on its share price;
Business B is valued at $20M based on its share price

Do you buy Business A or Business B?

The lower business value is more attractive to a buyer.

GMC have a diluted market cap of $35M based on the current share price of $0.01 for 75% of the project.
The Investor paid $6M for 25% of the Project (i.e. comparably $18M for 75%).

If you include the $7M debt (once GMC spend the cash), GMC's business value increases to $42M ($35M +$7M). (Due to Assets = Debt + Shareholder Equity (Market Cap))

So great if you want to think this is a $42M business, but then it makes the value proposition worse to buyers...

Separately, where are GMC's smelters? How can shipping be delayed - I would have thought transport from port A to port B could at least go to plan?

Expand

So what you’re trying to say is when two companies have the same/similar intrinsic value, you buy the one with the lowest share price.

Should’ve just said that.

GMC Price at posting: 1.0¢ Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

Reply

Top Stories

AI stocks: What to expect in 2024-25

Talking Australia's very competitive property landscape: Realty Talks

NRX

Noronex joins forces with South32 to look for copper in Namibia

FMG

Andrew Forrest was seemingly possessed by the spirit of hydrogen – now he's cut 700 jobs and canned FFI

EVN

Evolution shares up 3% on quarterly results for June showing rise in gold production

There are more pages in this discussion • 15 more messages in this thread...

First 19 Last

Add GMC (ASX) to my watchlist