You cannot look at a stock and deem its a poor investment or likely to have poor return based soley on SoI.
As previously mentioned there are far more factors impacting share price than this one minor attribute to a company.
Data that would be more important to review before investing IMO:
Has the company got good management and is that management experienced enough and have the skill set for their particular roles at the company
What is the objective of the company, does it align with yours and managements
What has the company delivered on in the past, have they meet timing requirements, have they made good on capital growth in the share
What capital raises have they done in the past, what was the money used on, has the capital growth seen a greater share price increase than the dilutive nature of the raise.
What is the jurisdiction the company operates out of, is it risk, does it have a history of corruption?
What are we partnering with and or if not who do we have connections too? Do any of these people stick out with regards to fraud, bankruptcy or any other character trait that would make you question why they are associated with said company.
These any many other questions have far more weight on an investment decision that shares on issue. The actual market cap is also far more weighty as thats effectively the market value of the company at present date.
An while shares on issue can be construed as impacting negatively, it also can be construed in a positive manner. You see the lack of share price movement as weighed down by SoI. I argue that the more shares you have on issue the more price stability you get. I also argue that more people have access to partake in that company due to a higher SoI and therefore a dragged down share price for entry. I also argue that more shares on issue results in higher liquidity than companies with lower SoI. Because higher shares on issue means there is more likely someone to part with their shares than can be said for a company with less shares.
"Every price rise is hard with 9B on issue." As is every price decline.
Even EPS is debatable after further research from myself. EPS isnt really implicated by SoI. Because a company that has a high volume of shares your more likely to hold a larger parcel of. For example:
$100 to by 10 shares at $10 assume total SoI is 100. So under this scenario you own 10% of said company. $100 to by 100 shares at $1 assume total SoI is 1000. Under this scenario you still own 10% of said company.
Shorts have shorted the likes of LTR, PLS all with substantially less SoI. So there is no argument SYA is being targeted due to SoI being an issue. There is no correlation whatsoever. There is more of a correlation to a lithium sector wide shorting than there is a SoI short correlation.
As for EPS. Management would pay more a higher dividend if there is less shares on issue and lower dividends if there is more shares on issue. The retain earnings gets paid out regardless unless they are retaining it for future use.
You also then need to factor in what I said above about ownership. A larger parcel at a lower price sees more shares so even if you get less earnings from dividends on smaller shares, its likely you own a greater parcel amount which would derive the same dividend under a lower SoI arrangement.
The conclusion is: to look at SoI and deem that as the determining factor for ridicule or glorification is a pretty fruit bat narrative (blind as a bat).
Even the market cap argument has more weight.
SYA Price at posting:
19.8¢ Sentiment: Buy Disclosure: Held
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