BCN/NGL What's wrong with my calculation?

[Steve]

Disclaimer:Never have, currently don't & porbably never will own any!

I have been using the recent changes as a mathematical exercise to keep the brain active & are confused with my result. It would be appreciated if someone could show me where my maths is going wrong.

Initially have 71,800 @ 2.4 = $1,723 (pre-consolidation),after the 1:71,800 consolidation have 1,000 @ 172 = $1,720

Market Cap = $4,300,026 [2,500,015 @ 172) THIS IS ALL GOOD!

Now, issue 50,000,000 @ 10 = $5,000,000

"Value" = market cap + new issue = $9,300,026

Value per share = $9,300,026 / 52,500,015 shares = 17.7c

Yet, the shares are trading approx 130c. WHAT HAVE I MISSED?!

[zyreon]

I calculated once that the new bcn shares would trade close to 1.50 which considering my purchase price of NGL made me sell due to uncertainty as to breakeven, let alone profit.

[Steve]

I can see how you would come to 150 based on the share consolidation, but how have you treated the dilutionary effect of the 50,000,000 new shares @ 10c?

This is where my calculation appears to loose relevance with the current share price.

[Steve]

Is there anyone out there who can look at the maths and tell me where I am going wrong???

Should I be ignoring the dilutionary effect of the new 50,000,000 shares?

[Paper Tiger]

I seem to recall that the aim of the 1:71.8 share consolidation was to create shares worth $1, this was based on the then trading price of the existing shares, which went up in value on the news and gives you your $1.72.
The 50 million new shares were issued for a nominal $1 each being $5 million cash (hence 10c per share) and the assets of Blue Chip (the other 90c per share).

Obviously the current share price is based on the usual beliefs of investors

Note the NTA for these shares is quoted as 0.599

[Steve]

Thanks PT

Based on the numbers, what does your maths suggest the share price would expected to be after all this?

[Paper Tiger]

2,500,015 @ $1.72 = $4,300,025.80
50,000,000 @ $1.00 = $50,000,000.00

$54,300,025.80 / 52,500,015 = $1.034

regards

[Steve]

Thanks for that. I should have been using $1 instead of $0.10 [:I]