Open Orphan Share Discussion Threads

[pierre oreilly] 22/4/2021 11:31

Libertine, in advance of the float, there'll be a book building exercise where brokers will ring investing institutions, like ip group for example (who wisely supplied seed capital to orph in a similarish situation as orph pharma today), and see how much they want to subscribe. They'll get the majority of the funding that way. There won't be an initial rights issue because at that stage orph will be the 100% shareholder -the cash is committed before the float. Orph owners gain by attracting new money, that's the whole idea. We may or may not be able to subscribe for the initial funding. We gain by selling a non core asset currently valued around zero, by increasing its value by tha act of funding. I referenced the post which explained this earlier.

Jeeze, I wish people would give c some credit and not just think he's wasting everyone's time by floating off unseeded assets for no gain.

[malcolmmm] 22/4/2021 11:21

Yes great, saying that I am of a mind not to buy more until after this demerger. I have voted in favour. It looks like many arnt sure what to do at this stage but as an almost 4 bagger I am comfortable to stay invested

[felchandbart] 22/4/2021 11:10

I can see the share price reaching new highs between now and confirmation of the first demerger on the 29th. OO is a winner with a very bright future. A great core business (very profitable and in demand) with the likelihood of not one, not two, not three - but four spin offs by the end of the year. Buy when get four free. Sounds pretty good to me. Holding firm and looking forward to spectacular further gains from Open Orphan plc, plus each of the spin offs. Bring it on, Cathal.

[faz] 22/4/2021 11:05

There is a company that buys up these 'orphaned' products from majors and does very well re-badging and marketing them. Its not that the like AZN or Glaxo dont want them, more that the market is likely to be too small to bother with as a multi-national giant. As a result they are under-vlaued assets. The company is Alliance Pharma (APH). I'm not ramping - I used to own shares but not now. Indeed I have failed a job interview there in the past, so they clearly know what they are doing :)

[extrader] 22/4/2021 10:59

.."You can`t remove part of a company`s assets and expect it to still be worth the same..."

I disagree.

I think it helps to think of the 'spin-offs' as being like 'stranded assets' in an oilco's portfolio.

They're on the books, but at minimal value as not 'commercial' , because they aren't going to be developed because oilco doesnt want to fund/bear development risks/costs. So 'no route to market'.

So it transfers the asset to 'newco' and gives its shareholders shares in newco, then invites other, specialist oilco's (or with adjacent explo area, perhaps) to buy in by putting up a certain amt of cash in exchange for a certain &age of the concession.

Under the IPO, Otherco gets 80-90% of 'newco' and is responsible for subsequent development incl. initial funding.

If there's later a funding round , all shareholders are invited to participate. They're free to decline (with consequent dilution).

That's a crude (see what I did there ?) analogy.....

Where it also works, of course, is that the concession might be ' highly prospective' but have eg geological or other issues that means it doesn't in the end work out aka 'doing a BiondVax' and falling at the Phase 3 fence...;-(

HTH

[klosters65] 22/4/2021 10:45

Succinctly summed up.

[extrader] 22/4/2021 10:41

.."You can`t remove part of a company`s assets and expect it to still be worth the same..."

I disagree.

I think it helps to think of the 'spin-offs' as being like 'stranded assets' in an oilco's portfolio.

They're on the books, but at minimal value as not 'commercial' , because they aren't going to be developed because oilco doesnt want to fund/bear development risks/costs. So 'no route to market'.

So it transfers the asset to 'newco' and gives its shareholders shares in newco, then invites other, specialist oilco's (or with adjacent explo area, perhaps) to buy in by putting up a certain amt of cash in exchange for a certain &age of the concession.

Under the IPO, Otherco gets 80-90% of 'newco' and is responsible for subsequent development incl. initial funding.

If there's later a funding round , all shareholders are invited to participate. They're free to decline (with consequent dilution).

That's a crude (see what I did there ?) analogy.....

HTH

[faz] 22/4/2021 10:37

If anyone is in doubt as to the potential upside for investors receiving in specie shares, take a look at RENX today. Freeing fledgling businesses within a company their head to run under their own steam can maximise benefits for the shareholder and also for the community - these are healthcare products after all.

[rafboy] 22/4/2021 10:17

He also mentioned a cash divi so well worth holding onto my shares.

[libertine] 22/4/2021 10:00

When the new company is formed from the demerger who do you think is going to fund it?

It will be you as shareholders. As well as your free shares you will be invited to participate in the fund raising by way of placing or rights issue. If you don`t participate your holding will be diluted, and you must hope the institutions take up the majority of the company shares.

If the new company`s assets are considered to have little value now, then the initial value of the new company will be reliant on the success of any fund raise (shareholder money).

If the assets do have a significant value on demerger it will be reflected in Open Orphan share price.

You can`t remove part of a company`s assets and expect it to still be worth the same.

[donaferentes] 22/4/2021 09:57

MMS taking advantage of uncertainty how to value this pre- and post- spin off to drop the price to frighten people into selling their shares. MMS will need more stock to sell at a higher price.

[inaminute] 22/4/2021 09:42

A set of financials with a strong forward looking trading statement should remove all doubt about the underlying value of the main company. I think these will be released at the most opportune time to support the share price and show what a bargain these ...free...shares are.

[wassapper] 22/4/2021 09:19

Yes pogue. You've hit the nail on the head.

[pierre oreilly] 22/4/2021 09:10

Mal,If you want to know the situation re the orph price variation over the divestment, and you don't want an opinion from traders which varies to reflect their current trading position, then it's in post 1543 above.

[pogue] 22/4/2021 09:03

We going to have to find a way to go to a negative share price when we demerge DiM if people are trying to take the valuation of the demerged asset from the share price.

[pierre oreilly] 22/4/2021 08:59

I see the moderated board is getting a dose of moderation a la snotty, i.e. allowing himself to post old bearish articles after he and his gang have sold. If anyone else posted bearishly when the gang held, then they'd soon be banished to an unmoderated thread. Leopards never change their spots. It coincides with the charts no less, one day the chart is the most bullish ever, next day when down a couple of p, the drop was always in the charts and what's more, the charts are saying don't buy back yet (wait till the chart man has bought back all he wants). That'll get the charts looking extremely positive again, even if exactly the same shape!.

[malcolmmm] 22/4/2021 08:55

I thought that Cathal is doing this because the spin-off companies values arnt taken into account and dont reflect the true value of ORPH

[judijudi] 22/4/2021 08:53

Anybody foolish enough to sell now is missing out on the 2nd bit of news due shortly as alluded to by CF

[marvelman] 22/4/2021 08:49

I think for many holders it was nothing more than an interesting summary. I don't think there will be many of us who will actually take it as any more than that. Unfortunately for new and possible investors it lacked substance and completely misled and understated the potential of the company.

[troutisout] 22/4/2021 08:49

I think many people are perhaps doing that, selling the shares now thinking the share price will drop on a demerger, personally although the drop is annoying I am holding and have bought more. There wasn't a premium for the demerged assets, but the doomsters want to take a premium from the Orph price. We are unlikely to know what the true value of the demerged asset is until it has started to trade.
Those shares will go into a long term hold for me, ORPH shares will recover once people realise that things are still growing and the valus hasn't been taken into account yet.

[wassapper] 22/4/2021 08:39

A totally useless Fool article. There was no substance to his argument. The assumption is that ORPH share price will drop on the demerger. If that is the case he should be selling soem now and voting against. Their articles are just clickbait to get lead you into the paid "best thing ever" article at the end.

[pogue] 22/4/2021 08:20

What demerger Malcolm? There is another planned in the next few weeks then 2 others to come at a later date. Buyers could have to wait until next year to avoid having free shares.

[malcolmmm] 22/4/2021 08:17

I expect a lot of people will wait until the demerger before buying more but then again a lot of people will be buying in before the demerger to obtain free shares and I expect it wont be 9 months before being able to trade in them. So it depends on how you feel but the whole point of the demerger is to enhance share holders value so if you have ORPH shares they may fall after the demerger but may be offset by far bigger gains in the free shares. So?

[adorling] 22/4/2021 08:08

“Our Disease in Motion business alone could be worth up to a billion dollars”

Just one of the many insightful answers CF gave to Medtech Trends.

[lfdkmp] 22/4/2021 07:57

Best part of that Fool article, in my opinion, was a fairly succinct resume of how ORPH got to where we are today.