I noticed this statement that was released by Minds + Machines (AIM:MMX) this week about the amount of shares it has issued and outstanding:
“The Board of Minds + Machines Group Limited (AIM:MMX) announces that as at the date of this announcement, the total number of shares in issue with voting rights is 831,969,485. “
So almost 832 Million shares.
That is a of of shares
I checked out how many shares Verisign (VRSN) the company that runs the .com and .net registry had issued and outstanding 125 Million shares.
Google has 676 Million shares issued and outstanding.
Between Google and Verisign there are just over 800 million shares which is still well below Minds + Machines 832 Million shares.
Tucows (TCX) has just over 11 Million Shares issued and outstanding.
Neustar (NSR) has over 56 million shares issued and outstanding.
So Minds + Machines has four times more issued and outstanding shares than Verisign, Tucows and Neustar combined.
Anyway you cut it 832 Million shares; that is a lot of shares.
Hi Michael,
You are probably not familiar with the AIM division of the London Stock Exchange but the general model is to list companies with a low share price and therefore a high number of shares, especially from additional equity funding for expansion. When we created MMX several years ago on AIM, we naturally followed this model as that in fact is the convention.
It should be noted that what is important is the market cap, not the number of shares. Frankly the number of shares is totally irrelevant. I am an investor in MMX and am of course extremely positive on the company’s future performance. I also feel that it is extremely undervalued at this time in my opinion – but that looks to be changing from recent trading patterns.
Google and Verisign are of course both listed in the US and the market convention is different across the pond. If MMX wanted to, for whatever bizarre reason, it could of course do a reverse share swap to reduce the number of shares outstanding; but I see no reason for it as I mentioned earlier – the number of shares is irrelevant, market cap is what matters.
If you’re hoping for MMX market cap to increase I suggest MMX first get the basics of there business in order, like keeping promises to customers.
Allocating, in a timely manor domains to the customer who actually wins an auction. I’m still waiting 3 weeks since I paid for successfully winning an auction. Whois for the domain would suggest someone else got my twice paid for domain for free.
GTLD = Good To Lose Dinero
Who da HECK would ever invest in a company that sponsors gtlds?
In 2 – 3 yrs and if gtld’s stumble, what do they call the “pink sheet” in the UK?
Do they call it penny stock in the UK or pense stock?
Just joking. Not wishing them ill will.
The axe is hanging over the head of dot com. Who is going to want dot com when you can have a gTLD that actually reflects your business, club, or interest, especially when it will be given prominence in google searches? Google are also intending to be major players in the gTLD revolution.
That’s astounding naivety by the author of the article. To compare the number of shares in issue for companies without reference to the mkt cap beggars belief.
MMX could quite easily do a share consolidation ex 1 new share for every 10 existing one and thus reduce the total number of shares by a factor of 10, whilst increasing the share price by the same multiple for the same mkt cap.
The author seems obviously unaware of this very basic fact. Its the mkt cap thats relevant ie no. of shares x the share price thats important, not the number of shares in issue in isolation.
On that basis, do a comparison of the Companies mentioned.
Sloppy journalism!
You’ll tend to find stocks listed on the UK exchanges tend to have lower share prices anyway with higher numbers of shares in circulation. Many top blue chip ftse 100 stocks are priced in the equivalent $2-10 range.
I disagree with the ‘sloppy journalism’ comment above but agree with the rest of Pophalos comment. I really enjoy reading Michael’s blog here and I think that this shows that MMX is getting on the radar screen of more people in the USA which is good, and one of the first fundamental DD items is shares in issue – as well as the more pertinent financial information like market cap, revenues, earnings, liabilities, etc.
In London we have different conventions and shares with lower prices generally on the belief that it stimulates demand from small investors. Whether it does in practice is a matter of contention, but that seems to be the view. I guess small investors in the USA tend to invest in mutual funds not individual shares so it doesn’t really matter.
I really don’t want to dwell on this too much as it is after all a non issue. If you look at two of the companies mentioned, Google has a market cap of $379 billion with a share price of $559. Verisign has a market cap of $7.2 bllion with a share price of about $60 per share. Minds and Machines has a market cap of about $133 million with a share price (US $ equivalent) of about $0.16. Simply put, VRSN is trading at a current market cap that is 54 times larger than MMX.
Personally, I prefer to invest in MMX.