Some final random "leaving the venture" thoughtsMarket Cap Jumped Today -- Very Key Today's jump in price increased the market cap from yesterday's $544MM to $606MM. That $600MM is an interesting and tasty threshold, for a few reasons:
1/ the higher the market cap coming in, the more interest for investors, as they see higher cap companies as more derisked from the get-go than lower cap companies
2/ larger cap companies by nature (on average, doesn't include one-note phenoms) tend to have more broadly diversifed revenue channels and business structures, so again, are seen as derisked and more favourable by the market -- and also seen as less sensitive to economic headwinds, so are more trustworthy buys long-term.
3/ PYR enters the TSX as a "mid-cap" company, which by the TSX terms is betwen $250MM to $1Bn. The $606MM puts it almost smack dab in the middle of the mid-cap category -- indicating not a newly minted mid-cap company that has just edged over the line and might recede, but a company firmly in the territory, but still with plenty of room to move within mid-cap space (it's a psychological thing).
4/ many stock screeners used by day traders set $500MM as the minimum trading set, or set those screeners in $100MM increments. Being at $606MM keeps PYR well above the risk of falling below $500MM, while also putting it into the next trading set.
5/ $600MM is an interesting threshold in another way, although a little more abstract. The US S&P SmallCap 600 has a base requirement of $600MM cap. While that's in USD, it's another psychological threshold to be in that $600MM range.
6/ Peter gained back alot of money today; that's gonna make him a happy man, and give him some much needed energy for the days ahead. ;)
Potentail Price Jump Math for Tomorrow There’s no guarantee, but a price jump is expected. A hint at how much may be found in the prices around the recent share issuance, which for uplistings is meant to be a similar process to what net new listed companies go through for IPOs.
For IPOs, investment banks aim to secure a 25% discount (for the first day live price) from what they believe to be the anticipated initial price jump of the offering, so that it will go up after listing and the bank (and its clients) will profit.
In the same way... when PYR first initiated its bought deal process, the sp was around $4. Mackie secured a $3.60 public price (and an actual $3.36 cost to Mackie after fees). If you add 25% (of that original $4, which is $1) back to $3.60, you’d get $4.60. Odd math, but it’s one way of doing it.
So by my math we’re good to see a $4.60+ day tomorrow, if not a 25% gain on today’s close, which would take it to $4.81. Also, that $4 the SP was hovering at when the bought deal process started? I have a sense that’s no coincidence and Peter wanted to be at that number minimum, because... $4 per share is the listing requirement for Nasdaq. Proving that $4 is a minimum base for PYR serves it well later as it seeks Nasdaq entry. And while the Nasdaq $4 is in USD, the psychological threshold of $4 is still $4 (Americans don't think of their $4 as $6 somewhere else, and CDNs don't think of our $4 as $3 somewhere else. It's just $4). These Past Few Weeks Have Been Marketing for the Uplist Many may have been wondering why Peter was out there so frequently on Agoracom these past few weeks answering questions, given how insanely busy he must have been, and how much investors want him to focus on contracts. I mentioned in an earlier post that it indicated a few things, and I've thought of another. To recap: 1/ he really wants to give the investment community time and information to fully understand and digest the play. 2/ He wants existing investors to understand where he is coming from in terms of strategy (despite being handcuffed by the regulatory rules on commenting) for many reasons, but also because... 3/ he genuinely feels bad about the share price drop of late and wants to provide reassurance. 4/ Uplist is any day. He’s making an extra effort to summarize because of the close proximity to the uplist, as even more eyes will be looking to understand the model and these Q&As are a good opportunity to grease the runway a little prior to uplist -- for new retail and institutional invstors, and for financial media. It's that #4 that I thought more about today, and realized... If this was an IPO (a first time listing anywhere for a company), there’s what’s known as a “marketing” phase, where both investment banks and the company promote the fact that this new company is coming to the stock market. As a junior listed company already, PYR didn’t have that opportunity. So... Peter created his own marketing phase —- drawing attention to himself and PYR through those Q&As on Agoracom. In retrospect, I even think some of his answers were intentionally slightly combative to draw even more attention. Alot of people both this week and next may start to track back and read posts, and wonder, "who is this guy? He's not your average CEO, I like that guy, that seems like a different kind of company", etc. Well played, sir. In addition, today's news release was also perfectly timed for marketing purposes. As those who only trade on the TSX find out tomorrow about PYR, their due didligence will take them to the very last release or two. It had been a couple weeks since any contract news appeared, with $$$$ included, so this was perfectly done to showcase the scale of the finances PYR is playing at. Add to that the lease strategy announcement just prior to that, and boom, a very hefty intro to PYR.
So goodbye venture exchange, you've served your purpose. Now on to the real show.