Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

Milkworx and Ubulele

Reply
Werner_1
Super Contributor
anyone been following these developments, whats your views on this deal. see latest SENS on Milkworx (Announcement of offer to shareholders of Ububele) - maybe this deal can revive milkworx, any thoughts?
0 Kudos
14 REPLIES 14
MenuOption
Frequent Contributor
Werner, long long ago there was a joke on this fine forum that every time the CEO of MilkW gave a speech to potential investors over a weekend, you would see the share-price go up by 30-50 % on the next monday as the gullable buy in, only to see the price go back down over the next few days. That was long ago though and have not seen too much posts on the share since then. But they may do well over the next 50 odd years; global warming is just the thing for the ice cream business. ;-)
0 Kudos
Werner_1
Super Contributor
Check out the Ububele website, this company is much more than just milkworx (which i would never invest in) and the reverse listing is actually a buyout where Ububele will have control. Milkworx only makes up about 13% of the proposed business, so maybe the new entity can get things going a bit better. - http://www.ububele.co.za/ - i'm just checking this one out as someone asked me to, will see what happens...
0 Kudos
Not applicable
Ja, I am not understanding hte mechanism here. Are we supposed to buy shares in a worthless company, in order to gain shares in a company with prospects? TINSTAFL
0 Kudos
Werner_1
Super Contributor
Thats not what i said, just wanted to know if anyone researched the new entity... that is too much of a wild speculation and i wouldnt do that... but for interest i do look at lots of the deals going on...
0 Kudos
HateGauteng
Super Contributor
MKX did pick up a bit after the announcement but has returned to its old price range. I think 30 Aug is the MKX AGM. Wait and see I suppose.
0 Kudos
Not applicable
Hi Werner, sorry if my comment came across as misdirected. What I meant was that the entire deal doesn't make sense. You have an unlisted company taking out a listed company with a share swap. Now in principle, can milkworx offer so much value, that ubulele is prepared to take the expensive financing option of bringing on masses of shareholders into its organization?
0 Kudos
SimonPB
Valued Contributor
they issue a ton of new shares diluting the existing share holders to mere spectators ..
0 Kudos
Not applicable
which they are in anycase, so if they can trade their tickets from a maties / ikeys game to a western problems currie cup match, all the better for them
0 Kudos
Werner_1
Super Contributor
So what i see is that Milkworx makes up a very very small part of the proposed overall organisation, so its value is not that very important to the whole story, only its listing is what i think they after... i could be wrong...
0 Kudos
Not applicable
Why would a company wan't to obtain a listing like that? What is the benefit? They don't get any cash inflows - unless they now have a cheap mechanism for a rights issue?
0 Kudos
Werner_1
Super Contributor
I dont know, i would actually like to learn much more on these types of deals, thats why i asked opinions, etc. if anyone knows of a book that details these corporate deals, m&a, etc. please post the name below...
0 Kudos
Werner_1
Super Contributor
obviously not the actual deals, but just learning material on the subject of the deals in general.
0 Kudos
Harathke
Regular Contributor
The logic for a reverse listing is pretty simple: its cheaper and quicker than getting a new listing. Milkworx's most valuable asset is actually the fact that its shares are listed on the JSE. A reverse listing is legally just a listed company issuing more shares for another company, but in essence it involves a change in control and allows the unlisted company to get its assets listed through this already listed company. The major costs involved with the reverse listing are nowhere near as expensive as doing a full roadshow, prospect, presentations, etc etc etc that go with a brand new (direct) listing on the JSE. Hence, the fact that there are so many reverse listings in bombed out penny stocks (a healthy profitable listed business would never need to sell-out its listing via a reverse listing). Hope that helps.
0 Kudos
Werner_1
Super Contributor
Thanks, i think i had the idea it would be much cheaper, and your explanation is very good, clear and easy to understand, thanks again.
0 Kudos