One of my readers has sent me the following piece. It was written last week, but I have not had the chance to post it till now and so I have edited it as regards time periods mentioned. I suspect tonight’s well won match (pun intended) would help the planned share issue.
Otherwise I will leave the stage clear for Skinny, with only the necessary health warning – the value of shares can go down as well as up.
The problem with shares is in the valuation of the company and vice-versa
In order to value a ‘share’ one must have a valuation of what the ‘share’ is a share of. And in terms of a flotation, why the money is needed in the first place.
A company that needs financing for expansion is obviously a better ‘bet’ than one that needs to pay off debts.
For my example I shall use recent announcements by Charles Green regarding his flotation of Rangers.
Charles Green wants to raise £20 million. Why? Continue reading