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 are, again, asked to explain the announcement made by Optibiotix (OPTI) about a forthcoming GM. Okay here goes!
OptiBiotix has announced that it has "posted a circular to shareholders seeking approval to undertake a capital reduction. The circular will shortly be available on the Company's website (www.optibiotix.com) .The General Meeting will be held at 11.00 a.m. on 25 January 2018 at the offices of Jeffreys Henry LLP, Finsgate, 5-7 Cranwood Street, London, EC1V 9EE."
This is not as some idiot savants on BBs suggest a meeting to reduce the nominal value of the shares so that a placing can take place. For starters the shares trade at a massive premium to the nominal value and moreover the company has cash and is now generating cash.
This is purely an accounting measure to eliminate the retained P&L loss in the balance sheet to allow dividend payments. We would imagine that the first dividend will be an in-specie distribution of the shares Optibiotix owns in SkinBioTherapeutics (SBTX) and thereafter there will be cash payments as Optibiotix's profits ramp up massively.
It is all positive so feel free to get the Chairman to vote your shares in favour of the proposal. We expect news of more contracts - possibly one very large one indeed - shortly and that this will finally drive a major re-rate. At 64p-66p the stance is VERY STRONG BUY with a price target of well over 100p to sell.
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