Post by
Starsearcher80 on Sep 14, 2023 11:28am
ANATOMY OF THE FLOAT AND UPSIDE POTENTIAL
As I've mentioned before, I pay a lot of attention to the trades going through, to gain further insight into the stock beyond what is offered in press releases. Quite often, the trades tell a story that press releases simply can't. Other times, it leads me to question further and challenge my own beliefs. Given today's news, I'll offer up my thoughts here, an anatomy of the float and the upside potential.
1) Given the significant downturn of the past month, I think we have taken out a lot of weak hands. These would include traders caught on the wrong side of the trade, people who just don't evaluate a stock much beyond the share price, and those who may have been caught out on margin when the stock crossed the $3.00 level.
2) By all accounts, the stock is already held tightly. Ok you ask, well if that were true, why the decline? Fair enough question. You'll note that the decline was always on very light volume. These are the loose shares. These are not positional shares taken by true investors. Now, the curiosity here is this: How can loose shares move the stock like that? The only explanation I can offer up is that the tightly held shares at this level of risk/reward are ALREADY in place. While the loose shares might move the stock down, it isn't so much the price that leads to the next level of buying temptation. Ultimately, it's the risk/reward that brings in the next round of substantial buying. With this theory then, are there other levels of investment grade buyers out there? Absolutely. And all they need to pull the trigger on the buy is for the risk/reward to move to their favour.
3) When that risk'reward turns favourable for them, it's going to get very interesting. Because at that point, you have another whole swath of investors who will want in to the stock. But remember, the float is tight, and the next motivated round of buyers will be a whole new group coming in. With that, you have buying compression. A lot of people wanting to buy stock, but not a lot offered.
4) So the question becomes "what will motivate the next level of investors to see the risk/reward as favourable?" Personally, I think today's news release has that potential. For Nano to have proven their chemistry using 2000tpa is exceptional. Yes, we now enter the validation process. For the most part, I would say that this is somewhat of a redundant exercise, as Nano is not going to send out something that doesn't qualify, and Nano would know full well the expectations in advance.
5) As exciting as the news today is, and the upswing in share-price is a nice start, I think this will continue to ramp up. I would expect today's news to bring a lot of Institutional interest, and what better timing as well than to put Candiac on full display to Funds and Analysts. These are the entities that will really move the stock. And as that happens, further retail interest will follow. Given today's news, I would now expect to see that Fund/Analyst interest come in over the next 4-6 weeks. Even more so if Nano puts together site visits, which now just happen to time in perfectly.
6) At 2000tpa, Nano's profit potential is very strong. I can't remember the post I read (I think it was here) that did some of this math. If someone could repost, then great. Thank you in advance.
With today's news, I personally value Nano shareprice to be much higher than it currently is, up in the $6.00-$8.00 range. So why isn't it there yet? The market is not a perfect instrument. That's why shares can be vastly undervalued, or hugely frothy. Again, we are the early adopters of the stock. We are not the masses by any stretch. But as the Nano story broadens, and more eyeballs come to the stock, and more and more people want to by shares that are already showing to be scarce, the upside potential is huge. My $6-$8 range is only where I currently consider the stock should be trading at. But that's only a small step along the way to much much higher valuations. The market absolutely will respond, and when the masses come in, which will now be on an accellerated pace, I will have made a fortune.