Hi Taylor,
Thanks for all your posts and that great google sheet. I think it is worthwhile clearing up a few fallacies though on the MESO vs MSB.
When you look at a company you need to determine their currency position (e.g. long USD, short USD or neutral USD). For Mesoblast the company is centered around potential revenues most likely denominated in USD and COGS (USD would be my guess, maybe SGD or AUD if they decide to manufacture in Australia), MSG&A predominately USD based with a little bit of AUD and debt in USD.
The net position for Mesoblast is almost all USD neutral, which means changes in the currency shouldn't really move the NPV as it is almost all naturally hedged. That is why Wombat would base his tables in USD and then convert back to AUD to provide rough guidance on share price. The AUD share price could move slightly for that NPV conversion.
This is different to mining companies who have COGS heavy in AUD but a revenue based in USD (noting there is an inverse correlation of commodity price and USD/AUD exchange rate), which leads to larger gains and losses in FX and commodity movements.
Someone mentioned the idea of arbitrage, but that doesn't really play in a dual list market as the idea is you can hedge all sides of your bet to assume zero risk. Someone might be taking a punt on offloading a position before the market corrects, but that is a punt.
Good luck everyone, only a few days left!
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7 | 295447 | 1.150 |
3 | 70786 | 1.145 |
6 | 196386 | 1.140 |
3 | 75486 | 1.135 |
Price($) | Vol. | No. |
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1.165 | 32999 | 1 |
1.170 | 62618 | 6 |
1.175 | 48590 | 3 |
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