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21/11/14
19:31
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Originally posted by PleaseDYOR
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Summing it up the SP is a function of probability of different outcomes discounted for risk and uncertainty.
If probability of approval with no further delays is 60% SP is likely to be 60c on approval that expected value is .36 cents (.6*60c) if there is 35% of delays and associated CR the SP is likely be low say 15c that is expected value of .0525 if there is any outright rejection I dont see any share at all so 5%x0 =0.
That leaves expected value of 36c+5.25c = 41c at the moment, currently trading at around 30c which represents an 11c discount for the uncertainty or the market sees the risks or SP levels at a different level.
If anyone has anymore information on the what they see as the probability of the three options or just their own assessment of the 3 outcomes or expected SP on each outcome I would be interested to know.
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Yeah I have had math like that, for fair present value for a while, and near as I can tell, the only explanation I have had for the share price history, is me and the market have very different ideas on how likely approval is.