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  • FIRST POST
    • pvt
    • By pvt 20th Sep 16, 7:19 PM
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    pvt
    MarCap versus share price
    • #1
    • 20th Sep 16, 7:19 PM
    MarCap versus share price 20th Sep 16 at 7:19 PM
    I'm looking at a company that was talked up in last evening's Evening Standard business section.

    At its current share price the company has a market capitalisation of about GBP12m. But it has cash in the bank of USD28m, and no other significant liabilities that I can see. What am I missing?

    It just posted "disappointing" interims for H1 of 2016, but even so, if they simply liquidated the company it would be worth close to double its current share price. I don't get it.

    Can someone explain how the market capitalisation can be so far below its liquid assets, unless it's a company that makes fivers out of tenners?

    I'm not naming the company, otherwise I'm sure I'll be accused of plugging it.
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
Page 1
    • AnotherJoe
    • By AnotherJoe 21st Sep 16, 7:33 AM
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    AnotherJoe
    • #2
    • 21st Sep 16, 7:33 AM
    • #2
    • 21st Sep 16, 7:33 AM
    It may be burning through money at a rate that means the $28M (is that really dollars if it has a valuation in ?) won't last very long.
    • AndyT678
    • By AndyT678 21st Sep 16, 8:37 AM
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    AndyT678
    • #3
    • 21st Sep 16, 8:37 AM
    • #3
    • 21st Sep 16, 8:37 AM
    What's the date of the balance sheet that you're looking at?
    • pvt
    • By pvt 22nd Sep 16, 2:17 PM
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    pvt
    • #4
    • 22nd Sep 16, 2:17 PM
    • #4
    • 22nd Sep 16, 2:17 PM
    Yes the balance sheet is in US dollars. It is an Israeli company, listed on the AIM in the UK, with its principal place of business in the US. That's why the MarCap is in Sterling but the accounts in US$.

    The Balance Sheet is dated 30/6/16 and a quote from the Interim report dated 19th Sept quotes "Strong cash balance at 30 June 2016 of $28.1m".

    It listed in June 2015 at a price of 125p per share, and it is now 20p per share. I guess the cash is largely from the IPO.
    Last edited by pvt; 22-09-2016 at 2:20 PM.
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
    • AndyT678
    • By AndyT678 22nd Sep 16, 2:38 PM
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    AndyT678
    • #5
    • 22nd Sep 16, 2:38 PM
    • #5
    • 22nd Sep 16, 2:38 PM
    Difficult to reconcile share price now to cash they had in the bank 3 months ago...

    If you don't know why they needed to raise a big pile of cash then steer clear IMO.
    • EdGasket
    • By EdGasket 22nd Sep 16, 3:39 PM
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    EdGasket
    • #6
    • 22nd Sep 16, 3:39 PM
    • #6
    • 22nd Sep 16, 3:39 PM
    It costs money to pay everyone off and close a business. It might all be gone if they went out of business.

    I can't find any MarCap? Do you mean MAC (Marechale Capital); they only have a market cap of 1m GBP? What is the Epic code?
    • pvt
    • By pvt 22nd Sep 16, 6:10 PM
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    pvt
    • #7
    • 22nd Sep 16, 6:10 PM
    • #7
    • 22nd Sep 16, 6:10 PM
    Ed,

    MarCap is short for market capitalisation, which is the share price times the number of shares issued.

    The company is Adgorithms.
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
    • Thrugelmir
    • By Thrugelmir 22nd Sep 16, 6:26 PM
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    Thrugelmir
    • #8
    • 22nd Sep 16, 6:26 PM
    • #8
    • 22nd Sep 16, 6:26 PM
    The company is losing money so is eating through cash. The Directors may well come with cap in hand at a later date.

    Shareholders will also find themselves diluted by the low priced share options that exist.
    A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against a rainy day.
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