RE:how high should stock price go before being bought out?investor135 wrote: How high do you guys anticipate the stock price to go before this company is bought out?
Looking into my magic 8 ball here for the next 12 months...
IMO we are going to breach the $2.00 level before the end of the current drill program, based solely off of continued drilling at PLS (ie. assuming that Forest Lake does not turn up any delicious yellow cake). I know most posters on this board like a $10/lb valuation multiple, but I prefer a slightly more conservatice $9/lb and estimate we will have delineated roughly 80 million lbs, giving us a $2.00 valuation.
Once the current drilling program wraps up, although assays will continue to be reported weekly, I see the share price pulling back slightly, but forming a solid base in the $1.75 - $.1.95 range. Given the strong correlation between scints and assays results reported to date, I don't see assays alone being enough to push PLS out of this range. The traders (and perhaps some long-term investors) will be looking to take some profit off the table based on technicals, but as each day goes by there will be a heightened risk that persons get halted out of a buy-out. So although the stock price might be fairly predicatable in the weeks/months between drill programs, I certainly will not be one of those persons making trades.
Leading into the summer drill program, we will see new 52-week highs, and be pushing the $2.00 - $2.50 range. 100 million lbs at 9$/lb would give us a valuation of approximately $2.50. I feel that $100 million lbs is not only possible, but it is very a realistic and perhaps even a conservative target once the summer drill program has commenced.
For some reason I don't think the big boys going to watch from the sidelines as FCU proves more than 100 million lbs. I see the first bid coming in around the $2.30 to $2.60 mark, and then after that all that will matter is whether someone else wants to step up to the plate or not. Once the first bid comes in, actual lbs in the ground will lose significance.
Assuming FCU gets a reasonable premium on the first bid, shareholders will not be wise to reject the bid. If a White Knight comes along, we will end up closer, or perhaps even above, the $3.00 mark. Trust me - I would love for that to happen...I am all-in on FCU. But when I look into my magic 8 ball today, I see the final closing price coming in at closer to the $2.30 to $2.60 range. Some will be ecstatic, others will feel like they were ripped off and that FCU's potential multi-100 million lb deposit was stolen from them. Regardless of one's perspective, I consider it highly unlikely that FCU will still be around by the end of the summer drill program.
That is what my 8 ball tells me. I may not be quite as optimistic as some (such as the "Bull($hit)man") - those that have touted the $3 to $4 range - but I am more comfortable basing my assumptions on what I consider to be more realistic and conservative probabilities. A $2.50 buyout implies more than a 50% return from today's close, which is nothing to sneeze at. Anything above this would be the proverbial cherry on top of the yellow cake.
Normally they say that the greedy pigs get slaughtered, but normally they aren't talking about a sure thing like FCU. I am overweight FCU and intend to be so until we get a buyout. Stay long and prosper!