Slightly off-piste but wortha mention as it’s a perfect storm:
Look at the time of year –the economic climate – general feeling amongst the general public – this maywell be a factor as to why numbers of smaller private investors are bailing outof COI as shareholders which manifests as multiple smaller sells going through.
Certainly here in the UKinterest rates rises are biting – inflation is running at approx. 10.7% withthe costs of essentials (food/fuel/gas/electricity) rising exponentially – thisin turn means that many are ‘feeling the pinch’ and doing what they can tominimise expenditure and using money that had previously been set aside insavings/investments to make up any shortfall in income requirements.
COI had a fairy substantialweighting of private investor shareholders – thus it’s not surprising that manyof those private investors are selling at this time at a loss with theinstitutions hoovering up any loose shares at a cheap price.
Like many others herebelonging to a hard-core group a private investor – I have always believed inCOI’s potential and management and will wait for this to ‘play out’ – but it ishugely frustrating to watch the market cap of COI continue to fall as the value ofit’s asset base rises.
Sadly this is just the waythe markets work with the market cap of any listed company being calculatedusing simple arithmetic – i.e. – multiplying the amount of issued shares by theprice the last share was traded. This valuation system is flawed – it alwayshas been flawed – which is why many companies now opt to remain in privateownership with company valuations calculated by looking at net asset worth toprovide a base line valuation figure.
No different from say ahousing estate with 100 identical houses all and each of which sold for£500,000 with the banks happy to lend against that property valuation figure.If these houses were held in a listed company and they were the only asset ofthis listed company (a desperately simple example I know) – should it bedecided to offload one of those houses for say £450,000 for a quick sale tocover ongoing running costs – immediately the markets would value the remaining99 houses at £450,000 each which in turn would translate into a £5,000,000 dropin the listed company market cap.
Had those same houses beenheld in a private company – should a company valuation be required afterdisposal of one house to cover running costs – the valuation would becalculation would be based on the open market worth of the remaining 99 houses– NOT based on the discounted sold house to cover running costs.
That is a major reason in myopinion as to why we are witnessing downward pressure on COI’s market cap.Nothing to do with company fundamentals or our management – just symptomaticpain that results from investing in a smaller listed company where a minimalvolume of traded shares has a dramatic effect on the market cap.
Nothing new here – butsometimes it’s good to look from the situation from ‘outside the box’.
A belated Happy New Year toall – here’s hoping that 2023 is COI’s year.
(20min delay)