Explaining the gap betweeen $5 and 70 cents
The thinking of this board seems to gravitate toward a $5 per share price and the action of the larger traders who actually set the price is currently around 70 cents. Why the gap?
The big traders know everything that is on this board, and they probably know a lot more than that. So what accounts for the discount from $5 that is said here to be a reasonable future price?
Expected earnings is not the answer because the big traders know these same parameters that are recently mentioned here.
Here are some reasons that I can think of that the price is discounted:
1. the expected earnings are not realized and reported, so they are not very precise (including growth expectations for at least several quarters ahead)
2. the deal may fail to settle in January (I think that is very unlikely since the CEO of PIOE is from the leadership of RCP 3.)
3. the stock is undervalued because it is practically unknown
That's all that I can think of.
I believe that #1 and #2 are very small factors of a difference of opinion, so we are hanging our hats on #3 as accounting for the big gap.
I don't put much weight into that 70 cents is appropriate "now" but $5 would be right soon after January. What would you pay for something expected strongly to be worth $5 in January? I'd pay $4 at least. If something were weakly expected to be $5 then, maybe 70 cents would be ok.
The rest of the difference would be errors in our estimation of value.
I am hoping that #3 is very large and our errors turn out very large, too, and the price hits $10!
By the way, I have personally also ruled out that any RCP entity will remain outside of PIOE. Even though the press release was not totally precise, I think it could be interpreted as meaning all RCP entities. It makes no sense to me that there would be other competing groups allowed to continue.
I would not be surprised to see "P10 Industries" renamed to "RCP Holdings" or some such change, considering where power now lies in the management.
Always be on guard for misleading, deceptive or erroneous messages. I am not an investment professional. My messages are my opinion only, and are subject to change when contrary information is later relied upon. Always do your own research.
