GREY:SOLBF - Post by User
Post by
BCdudeon Apr 02, 2021 1:48pm
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Post# 32932358
Classic case of misjudged timing
Classic case of misjudged timingI undefstand why companies like SOLV are eager to list on a stock exchange -- especially when the tech sector as a whole is in hot demand. But SOLV would have been wise to delay listing until they had developed the business and had some cash flow. Look at BNXA, recently listed on the TSXV, which had been around since 2014 and had several million in revenue before listing. They were able to list at a higher price and the cost of capital is a bit more reasonable.
SOLV has no revenue and is just at the beginning of marketing their tech. This suggests a number of highly dilutive rounds of money raising in the capital markets -- probably at a very low share price -- which means that once they actually have revenue they will likely have well over 200 million shares outstanding and a warrant overhang from h*ll.
Companies like SOLV are much better served to develop their business using venture capital money first, and once they have a foundation established they can think about listing on a stock exchange.
My two cents.