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Optibiotix: sole broker, warrants, de-merger, share price

By HotStockRockets | Monday 3 October 2016


Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


We have been asked a few questions about Optibiotix (OPTI), none wildly important and so let's wrap them up into one article, in Q&A format.

Q. Why has Optibiotix moved to having only one broker, FinnCap
A. When Optibiotix started with the reversal into Ducat it was very much an AIM small cap and its broker (Peterhouse) caters to that end of the market. It is now a serious mid cap on AIM and so has a serious mid cap broker, FinnCap. It has outgrown Peterhouse and so parts amicably. that will save a few quid, most AIM Companies have just one broker.

Q. I see someone exercised some warrants. What does that mean?
A. Those who backed the original recapitalisation of Ducat at 8p got one warrant at 8p for each share they subscribed for. There were a few spivs in that issue and they mostly exercised and flipped a while ago. Most folks have now exercised their warrants but all must do so by January or they will lose them. We should note that FIML has £10,000 of warrants from that original deal and has not exercised yet.

We and the remaining holders would not be selling at the current 67p-70p or anywhere near so there is no rush to exercise. But expect a stream of warrant exercises in the run up to January but with nearly all of those exercising not selling. This process will generate a bit of cash for the company which can't do any harm.

Q. What has happened to the demerger of one of the four divisions?
A. There is not long to wait now.

Q. And why are the shares not doing anything?
A. They await either news of a big commercial deal or a demerger of a business unit or both. We do not expect to be waiting long and so at up to 80p we still rate the shares a buy.

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