Valuating BCN, page-9

Hi @Mundo122,

Funny you mention SOI as we just had a discussion back on the 16/04/2020 Post # 44086117. I asked one of our astute investors their thoughts on a consolidation. I found their answer below informative and aligned with my own research on BCN.

I'm interested @Mundo122 not holding the stock your reasons for concern as you wouldn't be looking at BCN though Rose Coloured Glasses. Personally I am extremely confident in my decision to invest in BCN as I have done my research but it is always good to listen to others opinions.

Here's what @MetalBee said and I hope they don't mind me reposting but it was a great take on this exact question.


"The SOI was the only red flag I could find with this stock prior to investing - and it nearly kept me out of the stock. But I looked at the fundamentals over and over, and came to the conclusion that I was ok with it. I'm glad I did, I am an unashamed promoter of this business on various stock forums.

First point I want to make is that SOI will only become a big problem when we are approaching $0.10 per share, as beyond that price point the share price moves in $0.005 increments vs current $0.001 increments. Effectively saying to get a movement in the price there needs to be a perceived shift in value of ~$14m v ~$2.8m - that's a lot of weight to lift. But it's also a good problem to have, as it means we have a market cap of around $300m.

Second point to make is that a consolidation of the share registry really only happens for two reasons, either to clean up the registry to create liquidity, or to clean up the registry to pave way for another capital raise. A lot of people think the latter is going to happen when a company consolidates the registry, and they run for the hills.

Do I think they should do one? Yes, when the share price is approaching $0.10 and has a considerable amount of cash to assure people that a raising is not on the cards.

Will they do one? I don't actually think they will. The directors have a lot of skin in this, and really I don't think they give a squirt about stock liquidity. Why would they? The have shown they are not overly phased by the day-to-day price movement, as ultimately they will get their payoff via dividends.

I actually feel our shares on issue have protected us at times, as much as hindered. The lack of liquidity is felt both ways. Hence I call this stock the turtle. Slowly, but relentlessly plodding towards the payoff."