MRQ (ASX) Retraction of Fully Diluted Market Cap Assumption

Originally posted by 2ic: ↑

I'm going over my previous MRQ posts to see where I might have been misleading or inaccurate following complaints to HC by the company. Just starting, but read the TA thread discussion today where some posters have regrets about not taking profits in the 2's a couple of weeks ago after being swayed by bullish posters to hang on for the next price lift. It's a reminder of how important it is to be careful of the stock market's inherent uncertainty when posting opinions and conclusions. Better late than never, but I would like to retract my assertion that MRQ should have it's market cap considered on a 'fully diluted basis' of ~2.1B shares based on possible future share issues. Posters that argued against me were correct in fact. Material uncertainty obviously exists that Performance Rights will trigger or Options that will be exercised.

Although i remain confident that the 160M A Perfomance Righs shares for a resource >350Mt >5% will trigger, and that such a resource will probably support a company produced economic scoping study that triggers 320M B Perfomance Rights shares, 'confident' is all I can be, not 'almost certain' as I posted. I'm embarrassed to admit, but my misplaced confidence that ~600M 1c Options would get exercised in December 2020 was a classic catch for young players; the 'recency effect'. When I arrived on the MRQ thread and it's shares were trading at 2.5c the options were so far in the money one I gave that recent share price too much weighting, and thus presented too much certainty.

Now the share price has come back towards 1c it's clear that many things could push the MRQ share under 1c by December and the 1c Options might pass un-exercised. The market might be underwhelmed by Koko Massava drill results (and by extension future resource statements) or disappointed in future exploration results from other targets. Option holders selling shares in the months before December to fund exercising the options rather than tip more funds into an already long position might pressure the price. The stock market might enter a substantial correction phase where junior explorers get heavily sold off indiscriminately. If the share price falls below 1c the market might become concerned about what price MRQ might raise capital to fund future work if the options are not exercised and the expected $6M Option money doesn't hit the bank.

The only certainty is MRQ has currently just over 1B shares on issue to calculate the market cap and that figure should be used when contemplating an investment. For me to state with such overconfidence that MRQ would almost certainly end up with 2.1B shares on issue by the end of the year was reckless and I apologise if anyone was mislead. I doubt it though, my opinion was thoroughly and rightly discredited by other posters at the time. Most posters on HC are usually over confident or over zealous in presenting their opinions, it goes with the territory, especially in the heat of debate when prosecuting an argument. Likewise, most readers should know it's them to keep this in mind when considering views and opinions discussed. Everyone has their own bias, views will differ, and HC is for informative discussion to help make your own mind up not investment advice obviously.

Good luck

Expand

a lot of mites in yr post their mate
Coronavirus might wipe out everyone by Dec 2020.
IF the ords are sub 1cent then you are right.
BUT if they are above 1 cent.....
i refer you to the pip margin today...
ords closing at 12 and opps at 6.
can you please explain this market phenomena in terms of your prediction.
Surely you think the opps should be at 2 then, not 6.

I have asked you repeatedly for your opinion as to fair market value, SP, of the ords.

my guess is you would like to see 0.0c for your agenda

I could write an essay here but, like you, I do not want to bore readers.

No.	Vol.	Price($)
31	44618611	0.4¢

No.

Vol.

Price($)

44618611

0.4¢

Price($)	Vol.	No.
0.5¢	11214907	17

Price($)

Vol.

No.

0.5¢

11214907

No.	Vol.	Price($)
31	44618611	0.004
40	74905566	0.003
35	47950255	0.002
40	104687279	0.001
0	0	0.000

No.

Vol.

Price($)

44618611

0.004

74905566

0.003

47950255

0.002

104687279

0.001

0.000

Price($)	Vol.	No.
0.005	11214907	17
0.006	6957363	16
0.007	9592894	13
0.008	7364594	10
0.009	13638900	9

Price($)

Vol.

No.

0.005

11214907

0.006

6957363

0.007

9592894

0.008

7364594

0.009

13638900

(20min delay)
Last 0.4¢		Change -0.001(11.1%)		Mkt cap ! $10.10M

Open	High	Low	Value	Volume
0.5¢	0.5¢	0.4¢	$29.26K	6.381M

Retraction of Fully Diluted Market Cap Assumption, page-17

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