No I'm saying that is highly unlikely but that's how companies win with acquisitions. How it works is we currently have a MC of 100 million for 9.5c that's not what Buddy is worth at the moment, let alone with more dilution. So if we overpay for revenue depending on how many more shares come onto the register it is a loss in the long run. We may have a MC of 200 mill at 9.5c. So to get to 20c we would need to get to 400 mill MC and justify it. If the company we buy isn't producing enough revenue for what we paid the SP will struggle for years.
This is why people hate acquisitions and they normally end companies. The growth rate in SP terms is non existent due to dilution. BUD already has a sheet load of shares on issue and can't justify the MC at present. Then they will need buy back shares years later to begin the growth process that's if they survive.
So the deal itself is key, how much dilution for how much revenue. Buying a company and seeing more revenue isn't always a good thing with millions of extra shares on issue.
I never understood a lot of this at the start of investing I would just read announcements and go more revenue but SP would struggle.
MC is very important and at 9.5c for 100mill that's ridiculous already. So if we get a sheet deal it won't be good.
You can only hope the company is cheap to buy or wants to go public and work with Buddy so we a special deal, all IMO.
BUD Price at posting:
9.5¢ Sentiment: Hold Disclosure: Held
