Value Vs Price

We all know the old saying "Price is what you pay, Value is what you receive".

Cellestis is the absolute demonstration of this.

We have been offered the justification for this lowball offer that the price is 24% above the one month Volume Weighted Average Price. 

That is simply a failure of logic.

As investors, we want a recognition of the Value of our investment, not a comparison price to a market price. We all know that the market rarely prices value correctly. A mere few weeks ago Cellestis was trading at $2.40. Immediately before the takeover the shares were trading at $3. Had the value of Cellestis shares really changed by 25% in those few short weeks? Of course not. 

So many things that have nothing whatsoever to do with Company value can impact the price of a share. We are all familiar with Companies that are adept at driving their share price to spectacular levels with aggresive announcements. (I certainly do not criticise our Directors for not having gone down this path). 

It is, however, worth considering how the share price might have been affected had the Company paid a larger dividend in the half year from cash profits earned in that half year for which (it is now clear) they had no purpose. 

Price does not equate to value.

I might value my ride-on mower at $5,000. If I was offered a price of $1000 for it last week then the fact that somebody offers me $1240 this week is not going to make me sell on the basis that the offer is 24% more than last weeks "price". This is all particlularly true if I had no plans to sell the mower in the first place. 

In our situation it is particularly galling when the Scheme calls for an Independant Expert to decide what is best for us. I have managed my investment in Cellestis for ten years now - I don't need somebody else to tell me that I am to be forced to sell my shares at a particular price.

But, guess what? The Independent Expert, The Cellestis Directors, other shareholders, Qiagen ... nobody ... can tell us to sell our shares at $3.55 if, together, we vote this Scheme down. 

If we demand that the value that we see in Cellestis be retrieved for us then it will be so.

(Don't forget to skip across to Cellestis Shareholders Action Group Blog and don't forget to REGISTER )