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I think there’s more behind it. Let’s look

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BeamMeUpScotty Member Level  Thursday, 05/16/19 08:39:53 AM
Re: Grouse Hunter post# 33607
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I think there’s more behind it. Let’s look at recent IPO’s and how they’ve faired in the current market. I think one way of looking at it is that the company wants to make sure that the price will run high enough to up list straight to NASDAQ and stay high enough to be listed there so they can borrow on the capital markets.

So what are the different types of financing? Well, apart from bank borrowing they’ll also have direct access to capital markets as I’ve already mentioned. Just think about it for a second.

If you had the choice would you borrow money on the capital markets where you issue shares or preferred shares to those buying the new stock, get a huge chunk of money to put in the bank and earn interest on, and not have to pay any interest to the person who buys the shares other than the broking fees or go to a bank borrow $bn’s and not be able to start making repayments on it for a few years while it’s clocking up interest that you also have to pay back.

So current market conditions are a factor in my view. That’s why so many OTC CEO’s go down the convertible financing route because they issue shares and never have to pay the money back. Obviously Delfin will not be issuing convertible debt but it’s the same concept - issuing shares to raise capital which will not accrue interest. - nor have to be repaid.

However, the point is this, of all the companies that are moving into the LNG space Delfin’s financing needs from what I’ve read here seem to be the lowest. So maybe they might be the ones who find it easiest to attract capital on the stock market because the capital providers will have a quicker return on their investment.

I think I remember reading somewhere on here that Delfin needs $4bn to start everything up? Happy to be corrected if I’m wrong if someone knows for sure?

But Delfin’s competitors need anything up to $20 bn to get going because they have to build all their infrastructure from scratch. Makes you wonder how long those companies will take to turn a profit?

So in my view Delfin is quite possibly the most attractive of all because a lot of their infrastructure is built and they have contracts in place and most importantly all three of the permits to start exporting as well.

They’re still far ahead of their competitors even though they haven’t done anything for a long time, but I think they’re waiting for the market to improve so they can get more money for issuing less shares or maybe a mixture of shares and loans.

However, here’s another analogy. As Facebook went through it’s development cycle each time it raised financing the intrinsic value of the company had risen. What did this mean? It meant that they had to issue fewer shares to get more money each time they had a finding round of private investors.

As funders can see that the company is actually moving ahead and can show consistent progress and achieving milestones, Wall Street analysts on those all important visits will mark the stock up.

My post are my opinion only. You should do your own due diligence before investing in any stock or take professional advice. I am not an investment advisor. Kind Regards.
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