Apologies for the long post, I wanted to justify my thoughts before just stating a figure. To clarify my thoughts are based on ISX being cleared by the ASX to resume trading, and no huge material updates from ISX, ASX or ASIC.
TL;DR - I think it will open low, my gut says ballpark 75c, however my head has given a range of 60c-80c depending on the sales pressure. I know many people will not agree with my sentiments but I think despite the ability to forward analyse the business and opportunity, short term thinking will prevail directly after the suspension is lifted.
I think a lot of people are not taking into account how valuable liquidity is in their opening estimates, people are much more fearful of losing money than they are making it. Never underestimate how important liquidity is to a market.
Shareholder sentiment is wary especially amongst less knowledgeable retail investors and those having a 'punt'. Whilst this makes up a small portion of ISX shares, it makes up a large portion of the available tradable shares on issue.
Majority of the shares on issue are held by the top 20 shareholders,(~80%) and of these there has yet be a disclosure of any sales from substantial holders.
Everyone who currently owns ISX shares has no liquidity in their assets, they are effectively at this current point in time, worthless. They cannot be traded. Whichever direction the announcements and findings go I believe that there will be considerable pressure on the SP as people try to regain liquidity, before analysing what happens next.
There have been a couple of significant panic sessions on the SP already, with a relatively small % of shares dictating the overall trading price it would not take much for it to open low, and stay low. I'm finding it hard to factor in an increase in SP immediately after the suspension ends. Even with positive updates released before suspension.
So, I think it is possible to expect a couple of things when the suspension is lifted:
1) Substantial holders will either sell, or not. If any of these substantial holders sell at the open then the price will be hammered over the coming weeks, lack of belief from the substantial holders would be devastating for shareholder confidence after the investigations.
2) More likely in my opinion is that the remaining available shares will dictate the price - as has happened over the last 8 months. Retail investors only have access to roughly 20% of outstanding shares and the price will be directly linked (obviously) to the trading of this 20%, with the lack of liquidity over the last month I think the downward pressure on the SP will outweigh any shorts closing their positions.
I believe that the SP will open low, as low as 50c-60c? Perhaps. Around 80c-90c? Almost definitely.
In the following weeks, assuming strong GPTV updates and announcements from ASX, I can see no reason why the SP would not be able to recover and assuming no fundamental wrongdoing by the company be extremely successful over the coming years.
Australia is new to Fin/RegTech I am not surprised that the ASX are asking them questions to familiarise themselves with the business model & what they do. For this to do really really well it will need to not only pass the scrutiny it is facing now but also be in the good graces of ASX/ASIC who will be looking at all their future progressions.
This is all my own thinking of course, I first bought into ISX in 2016 and have been fortunate to talk to many more knowledgeable people than myself in this area. Whilst we can have all the positive news available - NEVER - forget how important liquidity is to people's portfolios.
Sentiment is buy as this could be seen as an advantageous position to be in after the suspension is lifted (Conditional on the next round of announcements)
As always DYOR and form your own opinions to direct your actions.
Cheers
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