By Elric Langton | 6 December 2024
As I was painstakingly loading todayโs podcast, I discovered โ to my immense irritation โ that Tom Winnifrith had already beaten me to it, covering the exact same topic. Of course, he dives into the share price movements of both SkinBioTherapeutics and OptiBiotix Health, trotting out the very same rumours that have been clogging up my inbox: namely, the speculation that OptiBiotix is selling its stake in SkinBioTherapeutics.
Earlier today, I reached out to Stuart Ashman to address some of the investor concerns that had surfaced. For instance, thereโs talk of his plans to acquire additional assets โ perfectly reasonable in theory โ and his apparent identification of potential targets. However, what should have been communicated to investors was a cast-iron assurance that any future acquisitions would be funded through debt or cash, avoiding dilution. I explicitly warned him that Winnifrith would pounce on this like a lion on a limping gazelle, as is his trademark style. What I didnโt expect was for him to move this quickly.
Thanks to this, weโre grappling with yet another looming black cloud we could do without. On top of that, OptiBiotix's reported sale of SkinBioTherapeutics shares is casting an even darker shadow over proceedings. These are precisely the issues I tackle in todayโs podcast, though frankly, itโs exhausting to keep fighting fires while others stoke them with a blowtorch.
To his credit, Ashman stated he wouldnโt acquire any additional assets until โthe time is rightโ โ though, predictably, which is vague because it would be inside. What exactly does โthe time is rightโ mean? Beyond confirming he has no plans to buy in the short term, there was little to clarify.
Reading between the lines, I interpret this as Ashman keeping a cautious eye on incoming cash from Croda and ensuring the synergies from prior acquisitions are fully realised before making any bold moves. This is a prudent approach, no doubt, and one that most investors would likely welcome. However, the lack of specifics does little to assuage concerns and leaves the door open for speculation โ that is precisely where the trouble begins.
Investors want transparency, not riddles, particularly when the market is already skittish. Prudence is all well and good, but clear communication about what it looks like in practice would go a long way in calming the storm.
Winnifrith continues his usual tirade, dismissing investor concerns as wild conspiracy theories surrounding the share sale โ despite the inconvenient reality that weโve often been proven right.
For the record, the "contact" Winnifrith references is none other than a friend of mine (Toyin, if weโre naming names). The very same friend, mind you, who flagged the last round of OptiBiotix share salesโthose ones that Winnifrith brushed off with a wave of his self-assured hand, citing OโHaraโs ironclad promise that there were โno plansโ to sell more SkinBioTherapeutics shares.
Fast forward to now, and surprise, surpriseโthose pesky rumours turned out to be true. But of course, it wasnโt a conspiracy back then, was it? Oh no, just harmless speculation until the dilution inevitably flushed the truth into the open. And Winnifrith? Well, he seemed quite content to let that little hiccup slide quietly under the radar. Consistency, thy name is not Winnifrith.
He argues that OptiBiotix's sale of its stake in SkinBioTherapeutics is hardly a dazzling move and is โharming the valueโ. According to him, the proposals previously put to Stephen OโHara could have saved a comparable sum to what theyโll gain from the 1% share sale, thus better value in the long run as SkinBioTherapeutics gains value.
As if that werenโt enough, Winnifrith also suggests that Ashman could considerably calm the waters by putting his money where his mouth is and buying ยฃ100,000โยฃ200,000 worth of shares. Such a move, he claims, would neatly neutralise the impact of these shares being dumped onto the trading floor. However, Winnifrith, with his usual charm, ignores that there is an AGM to contend with, and it might be that Ashman has seen the Corda forecasts and launch plans, as indicated. Iโd suggest this is price-sensitive at this stage.
It would have been frustratingly hard to disagree with him on this point if not for the glaringly obvious. A meaningful insider purchase would send a strong signal to investors and potentially soften the fallout from these sales. Indeed, in an ideal world, we are not in one.
It is worth pointing out that OโHara has refused to answer Winnifrithโs questions about the share sale rumour, which has added fuel to the fire. I have no issue with any share sales, as they are an asset he acquired on the cheap; thus, he has the right to use the asset as he sees fit, though they are a frustrating annual event.
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