If there are too many shares on issue, does that mean every...

If there are too many shares on issue, does that mean every company with more shares is worse? So I guess by your logic, BHP must be a shocking company because it has more than 3 times as many shares??
I suppose that Fortescue must have gone from a good company to a bad one as well when it just did its recent share split and issued 10 times as many shares. I wonder how the share price kept going up??

Its a ridiculous argument that 1 billion shares on issue is bad for company A but 5b shares on issue for company B, C and D has no impact. Not a lot of logic to that.

I heard that at the next board meeting they are going to sit around and try to work out how to reduce the number of shares on issue. Making money is a distant second on the agenda.

THE NUMBER OF SHARES ON ISSUE HAS NO BARING ON THE SHARE PRICE!!!!

My god, it is a completely arbitrary number decided on by the company. If they want to reduce this number, all they need to do is put in on the agenda at the next agm and share holders would vote to reduce it. Or in the case of Fortescue, they wanted to increase the number so they put it to share holders and they approved it. Not very smart if a large number of shares is bad for a company. But they dont care because it has no impact on the share price whatsoever.

Number of shares on issue is the only constant in any ratio or equation. The variable is earnings and this is what causes movements in share prices. A P/E ratio is a barometer of how certain the future earnings are of a particular company. So companies with very solid earnings track records, certainty on future profitability, high barriers of entry into the industry - all these things will result in a company trading on a high P/E. ie companies like WOW, BXB etc.

Where there is uncertainty ie. companies with no earnings track record or companies that are highly leveraged to movements in only one highly volatile metal such as tin, it will trade on a low P/E. This is MLX. However once production starts, then the P/E will automatically expand because it has overcome the first hurdle of actually getting to production - creating more certainty on earnings. Get my drift?

You can say they are leveraged to nickel, phosphate and whatever else, but they are not, as they arent going to be earning revenues from those commodities for 2-3 years. So what the prices of those metals do today or tomorrow has no bearing on the sp whatsoever. When they get close to production on those metals, then the sp will start reacting to movements in those commodity prices. Wait and see how much the sp reacts to tin price movements once they are actually exporting the stuff.

THE REASON MLX HAS NOT MOVED YET IS BECAUSE YESTERDAY, TODAY, AND TOMORROW THE COMPANY EARNED A MASSIVE $0 FROM ITS TIN PRODUCTION.

Once it starts production in mid July and actually starts earning $$$, and the longer tin remains high and the quicker it can diversify its earnings across different commodities, the quicker the stock will earn a higher P/E.