The commentary here over the past few weeks has been pretty...

The commentary here over the past few weeks has been pretty thorough, and so I haven't felt the need to post here for a while. Apart from that, when a stock is on an upward trajectory I reckon it is generally best to just let the share price do the talking.

That said, over recent days I have found it curious how the share price seems to keep head-butting that 0.28 level. It appears that some of the prospective buyers and sellers seem to be viewing this as some kind of ceiling, and recently I've been mulling over whether this perception is accurate.

On the face of it, there seems to be logic in this notion. The last occasion at which the Vmoto share price was approaching anywhere near the current elevated heights was back in 2014 and early 2015, at which time the share price was mostly hovering between the 0.400 and 0.500 mark, as represented below.

Since that time, the total number of shares outstanding has increased by approximately 50%. Thus, while in 2014 a share price of 0.400 equated to a market capitalisation of 62 million, today, as a result of the increased number of shares outstanding that same market-cap would be reflected by a share price of just 0.275, which is pretty much where the share price sits at time of writing.

So, you get bit of an inkling from that as to why the market players seem have become convinced that the 0.28 level represents some type of barrier.

But is this conclusion justified?. One factor that doesn't seem to be being taken into account here is the macro backdrop.

The value of assets, such as Vmoto shares, are influenced by the cash rate. Fluctuations in the cash rate influence the time value of money. Today, if you have $100 sitting in in a bank savings account for a given period you are earning less than half as much in interest as you would have been for the same comparable period back in 2014.

As such, when official interest rates are high, as was the case for most of last decade, the money supply dries up, flowing out of riskier assets and into the safety of cash. By contrast, lower interest rate environments, as at this current time, results in a greater supply of money, buoying the values of shares and other less conservative assets.

Back when the VMT share price was last trading in the 0.40 to 0.50 range back in 2015, the RBA cash rate sat at 2%. Currently it is at 0.75%, less than half that rate. That bodes well for any stock with signs of growth, and Vmoto currently fits the bill.

When you factor in the changes in the cash-rate into the picture, there is a strong argument that the market capitalisation of this stock should be higher than where it was back in late 2014/ early 2015. My own feeling is that the 0.28 'barrier' is probably a bit illusionary, though no doubt we will know for sure soon.

Apart from that 'flow of money' argument, there is another reason as to why the super-low interest rate situation should bode well for Vmoto: the record-low interest rates reduce the likelihood of a major capital raising.

At the moment a company such as Vmoto would surely be able to borrow money at a rate well below their likely long-term future rate of growth, and it is hard to see why they would need to initiate a major capital raising in such an environment.