The Ookami Ltd (ASX: OOK) share price appears to be skyrocketing today. However, this is deceiving from what has really gone on behind the scenes. Before jumping in due to the fear of missing out (FOMO), have a read of what is really going on here.
At the time of writing, the Ookami share price is up 1127.27% to 27 cents. However, this shouldn’t be taken for face value, as you’ll see below.
The Ookami share price 10 bagger isn’t what it seems
At first glance, it would be easy to think this company has become a 10 bagger in a single day. Don’t as the saying goes… judge a book by its cover.
A while ago, Ookami operated in the software-as-a-service and digital asset space. The company had previously been developing an ecosystem of technology solutions involving blockchain-based smart contracts.
However, now the company has re-listed with a change in direction. In a major shift, the company acquired interests in two African exploration projects in March 2021. Specifically, this involved a 57% interest in Valhalla Minerals and a 100% interest in Cameroon Cobalt.
In the process of re-listing, the company undertook a consolidation of shares on issue. As a result, the number of shares on issue reduced from ~340.74 million to ~4.26 million. Doing some quick math, that is a 1 for every 80 share consolidation.
Essentially, if the market capitalisation of the company was to remain unchanged – the share price would need to be 80 times greater due to the reduction in share count.
Prior to relisting and consolidation, the Ookami share price was 2.2 cents. Therefore, to represent the same value post-consolidation, the new Ookami share price would need to be $1.76.
Based on this, the company’s share price has actually fallen 84% upon relisting.
Lastly, it is worth mentioning that the company plans on changing its name to Panthera Metals Limited.