RE: mc150000MC... I really appreciate the dialogue...
I completely agree that market theory suggests perfect efficiency... whereby the market would always properly value an entity's share capital. However, there are many many examples of situations where that is not the case. In fact, guys like Warren Buffet and many others have made careers out of identifying undervalued situations and either adding or selling to unlock value, in many cases getting vastly more value out of a corporation than the market valuation simply by dissassembly and sales of individual units.
The whole point here is this... we ( and management ) contend that the aggregation of all of the divisions within Prometic are worth substantially more than the market's valuation. If the company can clearly exhibit to the UK market that the UK division is worth $50mm... by showcasing the novel technology, presenting market / customer potential... and outlining a value of a discounted stream of cashflows... then the UK market may very well pay $50mm and that will be that..... Then the "lift" in value SHOULD get partially reflected back to Prometic's parent, especially if we retain 60-70% ... which seems to be the target number.
I think I understand the point you are making... but perhaps you arent fully appreciating just how much the market has discounted the actual underlying value in the parent company... Fundamentally, as Stoocks has repeatedly said... cash flow is king... The most simple valuation method used in the capital markets is a Discounted Cash Flow model. The market looks at potential cash flows from a company and then applies a discount rate on those cash flows given a whole variety of factors. One of the primary discount factors is the likelihood that they will occur or the "company risk".
Unfortunately, Prometic management has bungled and miscommunicated and delayed and even misled its core investor group for about three years now... and they have fundamentally failed to deliver cash flows from its apparently novel suite of technologies.... That has led to a massive institutional liquidation of its stock..... and ultimately to a substantial dilution because of its need for cash beyone its original plans... and here we sit.
The fundamental argument is this... the liquidation and all the bungling has pushed the market cap of this company WELL below the underlying value of its novel technologies and their potential...
One way to "unlock" that value is to break up the company into divisions and "exhibit" the underlying value of these divisions to shareholders that are specifically interested in these market niches or technologies.
I still maintain this is a sound strategy and I can totally see how the UK markets will pay up for this division and the parent co will benefit substantially. We'll see... I just think its a good bet. We are talking about WORLD CLASS technologies.
If someone came to you 5 years ago and said... we have developed the only proven blood filter bag to remove BSE and other prions from human blood and you can buy the whole business and its technology for $50mm ... wouldnt you think you would consider it ? The market is huge... you have virtually no competition... its a disease that costs blood agencies hundreds of millions... if no Billions of dollars worldwide to deal with... Have we lost this context ?