NMT Capital Raise

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Question asked 25/11/2023

NMT Capital Raise

Dear MM Team, Having just happily renewed my membership, I would be interested to have your view on the Neometals non-renounceable entitlement offer to existing holders (of which I am) at a 25% discount to last traded price? This is their first raise in 11 years. I have held & watched as the shared price has gradually significantly declined & I am reluctant to take part given their current balance sheet, quarterly cash outflows and currently no profit. Saying this I purchased with a view around their technology for a future growing EV economy. Do you think it would be prudent to hold, sell or 'top-up' given the highly speculative nature of this company in the hope of a future greener world? As ever, hindsight is wonderful & I wish I'd taken a profit at higher levels or closed my position entirely. Continue the good work & insights. Thanks, Bernie

Answer

Hi Bernie,

We appreciate the vote of confidence and it gives us a great deal of joy to know that so many of our members happily renew each year. Makes it all worthwhile.

Without having an interment knowledge of the company and what they are aiming to achieve, nor your personal circumstances (general advice only provided) this comes down to risk management. You highlighted a few things that would concern us – namely, balance sheet, quarterly cash outflows and currently no profit. While a discount is appealing, in a small company like this it can evaporate very quickly. Our preference would be to wait and see the company executing on their stated plans before throwing more money at it, however when it comes to risk management, position sizing as a proportion of an overall portfolio and the like, this is a personal decision.

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Neometals (NMT)

LAST UPDATED 25/11/2023 08:04

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