Same old, different stock

Funny to read about other stocks that are multibaggers and the same sort of comments when they were down.
You can find themes like today on all of them, HDR forums make me laugh;

This post from June when A2M was 65 cents, trading today at almost triple that;

the reasons A2M won’t go that high


http://hotcopper.com.au/threads/the-reasons-a2m-won’t-go-that-high.2541261/?get_post=true#.VozFJpN972S

Like or dislike, my personal opinion, here are the reasons A2M won’t go that high:

A2M has two options in front of it: accept the takeover offer or raise capital. If it goes the latter one, share price will drop. The reason why the price is chased to the current level could partially due to Goldman Sachs wants to heat up the market cap before the upcoming FPO deal for A2M. GS is currently advising A2M and is very likely become its underwriter for FPO.

Will the share go sky high? Perhaps NO. Look at the market cap of Freedom Foods and Dean Foods and cool yourself down. The Freedom Foods has market cap of $459m and A2M now has a very similar size of $421m. Imagine the price go further up to $90c, it will bring the market cap to $568m, larger than Freedom Foods. When was the last time you saw a small fish was able to swallow a bigger fish? You might think LBO? Well you should have enough equity to leverage it up and you have to pay interest. What about Dean Foods? US$1.6b. Much larger than A2M yes but I guess not large enough to buy “all the shares” at AUD$90c.

The takeover offer must be reasonable. 25%-40% premium above $50c would be considered fair. Some may argue the “great potential”. Well… if you were the bidder, would you pay the potential or you would rather gain the potential? The potential needs more funding, longer period, much more efforts plus uncertainties. If these are certainties of all these future glorious success, the share price would have already skyrocketed to the level you dream about.