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On further consideration, not having seen the placing offers, in my mind at least it would make sense why James Cheek was coy around the question of 'have discussions be had regarding going private'. I believe (my thoughts only) that he may have been considering that if the placing offers don't achieve the full £6m then they will have no option but to go private at. very low value I imagine else they simply wouldn't survive if they didn't.
I believe if the company doesn't achieve the full £6m in funds through the placing it will likely go private. I don't think there will be any further consideration at looking at other more dilutive funding - why would they, as they have already looked.
In my mind, it really does require the full £6m to be found from investors. On that basis, I will likely buy the placing shares for my entitlement (once HL email me of course!).
Its also worth noting that the £6m funds raise is the minimum that must be raised (and that is outside of the open offer which they hope to raise a further £2.1m from). So the total funds raised (assuming the full open offer is taken up would be £8.1m (or an additional 540,000,000 shares) on top of the 143 million shares in issues (resulting in a total of approx 683,000,000 shares in issue (assuming full entitlements taken). I welcome others thoughts in case I have misinterpreted.
I first invested here many years ago when there were only 38m share in total.
My brief observations and experiences are as follows:
*Stop loss on this share is useless. We were once sitting at approx 130p and I had a stop loss of 120p but the BOD (like this time) announced a share raise at a massive discount. The price sank so quick, my stop loss got executed at 85p! So be aware.
*Previously an issue raise was not fully subscribed and it was the beginning of a fundraising spiral. As well as reducing investment, it inhibited FDA advancement (although I think the CEO at that time was naive about eventual cost and pathway anyways)
*Such a massive increase in share volume 'should' at least improve liquidity i.e. make it easier to buy and sell shares in sensible volumes.
*If the share price returns to a sensible and more stable point, the increase in share volume 'should' also make the price less susceptible to pump/dump and other daily volatile movements. Making it less of a traders share.
*The price may take some time to get to an attractive level because many existing longterm shareholders will be wanting to dump and get out as soon as they can, but hopefully this may be steadied by more retail investment uptake as the company approvals arrive and sales increase.
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I personally will be taking up the offer to help ensure the company fully raises the funds required and continue to trade.
I know a few posters here moan about Cheek but I personally think he a knowledgeable set of hands who's been dealt this situation from a very 💩 deck. In my view the share price has fallen badly because of the Riverforte deal and them constantly selling aling with NICE delays. To abandon the the last tranche of the Rivft deal has probably stopped the share price being well below this level and still requiring another raise and even more discount.
His hands have also been tied by NICE and the NHS dinosaur, but I think he'll find a path to more sales both here and abroad. After all Mr Budd was nowhere near onboarding a partner for FDA application even after nearly two yrs taling about it!
I also think we were misled by NICE and their EVA pathway for the hearing test . We were being used as guinea pigs and it's been atrocious! This kit and assay had been designed for and at the request of the NHS. It had full trials, was proven, certified, then redesign at the NHS's request, then re-certified and still NICE required more to grant full recommendations. Dreadful!!
Luckily the stroke test has gone down the traditional route, which has been smoother, quicker but unfortunately still severely delayed.
This is still high risk but I believe/hope this could be GDRs 'El Alamein' moment.
But these are just my thoughts, you need to make your own judgement!
Valid comments welcome...
Thanks, 1Day for your excellent post and detailed analysis. Could you please shed some light on the Share price post placing and July 10th (NICE decision)? What would be the share price after those events? I am asking because I have invested too much in this share (it is my fault) and would never recover it after massive dilution. The 50p share price has gone now; like someone mentioned on this board, the maximum it can rise after sale is 15p.
Your opinion is required. Of course, no one predicts the share price. Thanks for your help.
Physical stop losses are indeed difficult to execute on a share as volatile as this (I use mental ones), but even so I find your logic baffling.
Are you trying to argue that you weren’t well served by a stop loss executing at 85p on a share that is now valued at just over 2?
@ onlyprofit
I've no real idea and I doubt anybody else has either. A great deal depends on the fund raise result and whether NICE deliver good news and without further delay.
@stockpickfree
I'm not arguing anything and I never mentioned anything about the current price. I am merely stating that (particularly on AIM small caps like GDR) a stop loss price is not a guaranteed price but a price at which below you wish sell. Your broker will execute 'at best possible price' as the price falls below your limit. It was more of a 'heads up' for newer investors about the volitiliy of this stock and others like it, no matter what the price they currently are whether it be 2p or 160p.
@stockpickfree
I forgot to mention that no, I was not served well by my stop loss at the time. SP was 130-140 my average was 110 hence my stop of 120, so 85 was not a good result.
David Budd became obsessed with making GDR 'debt free' and with no retail investment at the expense of the then much smaller pool of private investors.
What a great , well put together post Rodney, i could nt agree with your thoughts on Cheek . People wanted rid of RF and now they are saying they want it back . With this new deal we have funding for at least 12 months, enough for the FDA trials and possibly application AND shareholders have the chance to average down , personally from 39p to about 13p. Only Profit , With worldwide sales for the 2 tests at about £200m plus for anyone to say this will could never get above 15p are talking tripe, i am not saying it will but i would DEFINATELY not bet against it.
So, if I buy more at 1.5p and enough money isn't raised, I then lose my additional investment also?
A serious question as am pondering whether or not to take up my new 1.5p shares
Thanks in advance
@Rodney
I don’t think (no, I don’t think I know) that there isn’t a LTH on here who wouldn’t have benefited from the discipline of admitting they were wrong, and closing their position at a higher price to where we are now. That’s what I mean by using a stop loss, physical or mental.
If you are wrong the market will find you out, and we are all of us wrong a lot of the time. It just gets a lot more expensive the longer you take to realise it. You don’t postpone the inevitable by throwing good money after bad and averaging down.
And let me tell you, it is a lot more pleasurable to close your position at a small loss and live to fight another day. Once you are out of a stock you never think about it any more. The anxiety is over. You move on.
Leaving aside the financial foolhardiness, what’s the pleasure in holding a stock that is declining, endlessly, hoping that it will finally have a reversal, and you will recoup some of your losses?
I’ve done it myself in my time, and it’s torture.
Anyway, I’ve said my piece and won’t write on the subject again. I realise you guys know best, and I know nothing.
You can take a horse to water but you can’t make it drink.
@livinhope my understanding only (and I stress that, so please dyor) is that when a company goes private the company buys back all the shares in issue so it is the sole owner. The price at which they do this is the question though!. If they arent successful in the placing and go private, I imagine this would be below the 1.5p per share currently on offer. The difference as far as I'm aware between a company acquiring genedrive and going private is that an acquiring company would offer an enhanced payment in order to acquire the shares and offer either shares in the acquiring company or a full cash settlement for the shares (but at an an enhanced rate in order to convince shareholders to agree to the offer)...or a combination of both. As I say, my own understanding only so please do your own research). Welcome thoughts from the group.
Thanks very much Rud , appreciated
I should add also, that again my understanding is that if the full £6m isnt raise that any commitment to buy shares may not be taken up. I.e. when you commit to buying whatever amount of shares as part of open offer, you are committed to hand over that money (subject to the company raising at least £6m). If they dont raise that amount then you wont have to purchase the shares you committed too). Again, my view only so dyor
Ha ha , Stock you are right and like you say very hard to do at times as we all think we are great traders and right all the time, admitting we are not is hard to do. Lets hope we dont have to do it here for a while
Again Rud, thank you, this is helpful