There is a stock I like from an EV company I believe they have a decent chance of being a hit within the next few years. Using round numbers if the stock is at $2 and there are 300 million shares.
If they plan on adding another 100 million shares what is the math to figure out if I messed up or not?
At what value does the stock need to be in 2 years for this to have been a good idea?
This is a stock I plan on holding onto with hopes that it is a good long term investment. Should I buy know when I can now or is the smart move to wait after the extra shares are released and maybe pay more per share?
Edit: Thanks for the help everyone. I slightly understand this more. At least well enough to know this its not really a math problem. I’m going to keep buying shares and stop reading articles related to the stock. The diluting will happen but hopefully it goes up enough before then that it doesn’t matter.
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If you can’t do basic algebra then……well, you’re in the right place and will be highly regarded.
>The math to figure out if you messed up or not is simple. If the stock price is below $2 per share in two years, then you lost money on your investment. If the stock price is above $2 per share in two years, then you made money on your investment.
However, there are other factors to consider when making an investment decision like this. For example, what are the chances that the company will actually be successful and meet its goals? What else could you invest your money in and how does this compare? These are important questions to answer before making any final decisions.
whats the company
bro….
If you want to own this company, then buy it after they dilute, not before.
Question to everyone. If the 100 million new shares were offered at a lower price, say 1 instead of 2 dollars, would the stock price go down from 2 dollars to 1 something? Market cap wouldn’t rise linearly with the number of stocks I guess.
Slap your nuts over a fire
Sounds like the math problem you’re trying to figure out is market cap. At $2/share x 300m shares = EV company $600m market cap. After your 100m share injection with $600m market cap you get, $600m/400m shares = $1.50/share. If you want $2 share in two years time this EV company would have a value of $800m. Mind you I’m highly regarded.
What you will be probably looking for is (diluted eps)