Deca - it has been a few days now since TTH asked the question about a possible valuation of Genera and appropriate share price targets.
I have not performed any detailed analysis of this, and wondered if you had had time to have a proper go at it??
I will, however, share a few thoughts: 1) Assuming the float is placed with investors who will be long term supporters of Genera, I think that the stock should come on at a bit of a premium, let's say around 60 cents, as there simply shouldn't be much selling around. 2) For the first three months the options offer outlined in the prospectus (1:2 options, issued three months after listing) should assist in keeping the price pretty steady as you would be a fool to sell during this time (and a smart person to buy) given the value embedded in the options, 3) I think that the company will manage its newsflow very well, which will see strong share price growth in the later months of this year.
All up - by March 2009 I would expect the company to be trading on a multiple of 4 - 6x sales for FY10. My recollection is that the Third Wave analyst report suggested a sales multiple of 5-6x was appropriate for that company.
Deca - do you have a view on what FY10 sales could reasonably be? If you do, it would be great to hear that. . . if you don't, then I will have a stab at some back of the envelope maths in the next day or so.
GBI Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
