Tuesday, April 19, 2011

Nu2au had an excellent observation / question about the WTG share price (on Stockhouse)

This is my Stockhouse comment to his original post:

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=29597923&l=0&r=0&s=CMM&t=LIST

3 comments:

Uall said...

Hey Prod05,

This might very well be the case (that the market prices CMM at $0.40 because it thinks WTG is really worth $1.00). But if that's how the market is pricing CMM, they are pricing it inefficiently.

First of all, private placements are generally offered at discount to fair value to give an incentive for investors to subscribe... so best guess is that WTG should be worth more than $1.00. Obviously, it's not worth $2.60 or $4.50, but it's likely worth more than $1.00.

Second of all, the proposed "combined company" would include CMM's undervalued assets... so while WTG might be worth $1.00 standalone, it would be worth much more than that with an acquisition of CMM (which none of us wants a part of).

Uall said...

This line of reasoning just goes to show you how ridiculously undervalued we are... That we are undervalued even when you assume the merger with WTG (a garbage company) is completed.

nt300 said...

It's too bad WTG had to come into the picture. CMM was doing great before this ridiculous merger came along.