If you look at the performance of the share for the year, you can see that the value of the share was held stable with minor changes. In September last year, the share price was 36.50 GBP. From October to December, the shares were worth 32.00 GBP. From January to April, the share price was equal to 38.20 GBP. Since June, the shares have been falling slightly by 34.00. Today, the shares are worth 27.50 GBP. In June 2020, Union Jack Oil had no debts and cash in the balance sheet in the amount of 4.6 million pounds sterling. Last year, he spent 3.4 million pounds. Thus, since June 2020, it has had about 16 months of box office takeoff. The market capitalization of Union Jack Oil is 28 million pounds, and last year it burned 3.4 million pounds, which is 12% of the company’s market value. Given this situation, it is fair to say that the company will not have any special problems with attracting additional funds for growth, but the shareholders will be somewhat diluted.
According to experts, the situation with the burning of Union Jack Oil’s cash gives shareholders a real reason for optimism. Not only was its runway not bad, but its cash burn compared to the market cap was a really positive thing. Cash-burning companies are always on the riskier side, but after considering all the factors discussed in this short article, we are not too worried about the speed of their cash burning.
Paul could do better in his engineering profession where he became a real pro. However, he chose the finance field to find a tranquil environment in his career. Today he creates a good number of great content for our team.