Halelujah! We broke 80 cents!, page-14

I think you're right Maxineamillion, definitely a bargain at current prices, and I'd have to agree your conservative market cap estimate of around $350mil post IPO would be very easy to achieve at just 3 x cash backing.

I'm of the opinion we might actually reach your conservative share price target of $1.50 before the IPO. In fact I think we'll pass it. I think the market tends to be somewhat forward pricing based on expectations of the future. If the IPO is approved this week at the EGM on the 22nd I suspect the market will react accordingly and start valuing Benitec as if the fully underwritten IPO is done and the $95mil has already been raised. Consequently we'll be tracking towards an appropriate market cap before the IPO actually takes place.

If we work on a very conservative basis and use the possible market cap of around $350mil based on just 3 times cash backing after the IPO, then in the lead up to the IPO we could see the market cap approaching say something like $255mil (i.e. the $350mil less the $95mil to be raised via the IPO). With 115mil shares on issue the share price would be approaching $2.20. At that sort of price we'd only need to issue a touch over 43mil new shares to raise the $95mil. So with under 160mil shares on issue post IPO the share price would still be around the $2.20 mark to give us a market cap of approx. $350mil. But in my mind this is still absolute worst case scenario particularly given that for several months now we've been bouncing around approx. 4 x cash backing during a period where sentiment has been particularly low as a result of the past delays we have experienced to get to this point. So I'd be inclined to say worst case should be no worse than where we are currently at say 4 x cash backing which would add 33% and give us a share price more like $3.00.

What I think really adds some excitement moving forward which could translate into considerably higher valuations is that this potential re-rate could all happen within the next few weeks. The doubling/tripling of any company's share price in a matter of weeks can draw significant attention in itself. Add to this the US road shows, IPO and the potential to demonstrate efficacy and I think we'll have a repeat of early 2014. From memory at the peak we were valued around 8-9 times cash backing. This would get us up around the $1bil mark which I don't think is unreasonable. Put us along side the likes of bluebird and we'd still look dirt cheap.

My thoughts are still very firm that we will not do an IPO at last weeks prices and we will not need to issue all 115mil shares. We will raise at whatever the price is at the time of IPO which could very well be multiples of the current price given our tiny market cap relative to some of the lofty US valuations. I think dilution will be less than what most appear to be expecting (considerably less in fact) and I reckon based on a very conservative market cap of $350mil at just 3 x cash backing the share price will be well north of $2.00. $3.00 is probably more my in line with my thinking, but a share price approaching $10 in the lead up to the IPO wouldn't surprise me if everything falls into place.