We need a ‘rentry’ emoji 
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How about 
or 
?
[spoiler][/spoiler]
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Good shout! We’ll need to try and figure out the best way to label these.
Those may work!
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Did anyone else manage to grab some SXX shares when they dipped below 15p this week?
I can’t get my head around why so many people are buying SXX. What am I missing?
- negative return since IPO
- never made a profit
- penny stock
- never paid a dividend
- challenging sector of operation
Is this just people gambling for short term wins?
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I am invested, and I think it is very risky but it surprises me that every week it’s consistently a top buy
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It is a risk but, for me, after regularly visiting their website and keeping up to date on their progress, I’m happy that the overall operation is heading in the right direction.
They have already secured contracts with the Indian farming industry to supply the polyhalite mineral. Will they ever actually get it out of the ground?? Therein lies the risk…
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I feel personally that the risk is warranted, they are making good progress; also checking the website regularly. There is some pretty confident investment in them, namely JP Morgan and they are no mugs am sure. Would they have invested that amount if they weren’t confident?
Must say that my investment is relatively small thus far, about £80 for 500 shares
I was reading a little bit more into it this morning.
I don’t think JPM invested in them. They provided a revolving credit facility with a limit of $2.5B. It’s sort of like your credit card, you have a credit limit of say £5K. You can tap into it whenever you want.
Their agreement was “Completion of the US$500mln bond would unlock the US$2.5bn revolver from JPM and largely eliminate financing risk, a significant component of its 78% discount to net present value (68p).”
Oh right! Well that’s put my theory out of the window 
Do you have an idea of what the share price will hit if they do successfully start mining? Is there a way to do a rough calculation of this?
It’s always good to dig around yourself but I hope this gives you some idea:
Since I became aware of the stock, the price per share has been fluctuating between 14-18p. This has meant that I’ve been able to accumulate quite a number of shares at a relitively low cost - what I consider to be a reasonable amount of risk.
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Yahoo finance has a high of 50 and average of 45
Thanks, that gives a 12 month estimate. From what I’ve read previously, the first revenue is forecast for 2-3 years time.
I was thinking if there is a way to calculate the share value based on the expected revenue when they do start trading. I have read figures somewhere for the expected amount of material sold per annum and the price of it.
Not sure if this is the article you’re referencing, but the analyst is saying a 3-4 bagger is possible.
https://uk.finance.yahoo.com/news/sirius-minerals-share-price-buy-160154637.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAN4sKJxr8aQTHFqTt8ycmzp6BgAQhp4r3GaNDiIWQkqpPJc7pmdgCr1VD5eFBSBLysX1T698HaH-LbyZ-ggoXuoj7Cio9bchFvAN0qQrUpLw8k76b-UyRgAMAHnJj5Yl9BqtVNWt-wfpnOF7YfXX0bLCDf0jep-VqFhID-eWF2ZB
Thanks for the article mate. I was looking under the analysis section although not sure how good the information is. Sometimes on there it doesn’t have many analysts predictions. Also always seems to be a month behind.
I read a bit more about it. Please DYOR and due diligence. I was actually reluctant to post this as it’s intriguing. 
This my own analysis SXX. Disclaimer: This is not investment advice and I could be wrong in my analysis / assumptions.
Fundraising is as follows.
- $500M Senior Secured notes.
- $400M convertible bonds paying 5% per annum with an initial conversion 24 cents (USD) which is a 30% premium from the current market price.
- $425M equity placement at 15p
Second bullet point. This type of financing is known as toxic / death spiral financing. It’s a license to print shares.
They stated the "initial conversion price" of 24 US cents on top of the 5% annual coupon rate. How lucky are the 1% who are into these kinds of deals? Let’s call them “financiers”.
This meant that in the bond agreement, the financiers will be provided a floor level. This info is usually not available to small shareholders. Every time the share price drops, their conversion price will be adjusted accordingly so that their conversion price is greater or equal to the market value of the shares. They can’t lose basically unless the company goes bankrupt.
When they exercise their right to convert, the company would have to issue more common shares. They flood the market with fresh new shares. As a result, the share price is depressed for a while. They time it too. Usually, an RNS or a piece of positive news is released to make the share price jump. That’s when they usually start converting and sell at market to unsuspecting traders/investors. This can be seen from the chart over the past 10 years that’s looking like a mean-reverting pattern. The optimal sell area is in the range 30-45p.
This is a speculative lottery play. Yes, it can go 30-40% one day. When that happens, keep in mind the “financiers” converting their bonds and selling shares.
It looks like they’ve been doing this for a while now. Look at the number of shares in 2009 vs the number of shares today. It’s kind like the central bank printing currency to devalue it. In this case, we call it dilution.
JPM provided a $2.5B revolving credit facility. This is like a credit card on top of those bonds (debt) that they can use to develop them mines.
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Excellent analysis and due diligence, seems like many do not take this kind of care when selecting investments. It would be great if Freetrade wrote some articles on finance/corporate structuring etc. and performing analysis.
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