On what fundamental basis does the stock justify a price of...

On what fundamental basis does the stock justify a price of $2.50, Floydf?

The business's operations (operating and investing cash flows) have generated negative $22m over the last 4 years, so the reality is that the business is not yet self-funding and is insteat fund its dividend out of financing activies (e.g. raising equity). ROE has fallen from roughly 20% to roughly 12%, and at the price they've paid for DMX, the ROE will not improve. As i've said before, they've invested about $93m in the business over the last 3 years (before you even take into account the DMX acquisition), and haven't generated an appropriate return from that capital.

A price of $2.50 would require an enormous improvement in their capital efficiency. There are growth stocks out there with 15%+ ROEs, 5%+ fully franked dividends who can fund their capital requirements from operating cash flow - TOX is not even relative value let alone absolute value in my opinion.

The short-term SP movements don't mean anything - it's quite possible that the underwriters to the recent institutional placement have provided after-market price support to the stock to maximise the SPP take-up by retail punters. The real test for the share price will be what happens post the SPP.