The Ookami (ASX:OOK) share price is up 1,000% today, but don’t be fooled

10 bagger? Not quite, here’s a closer look…
The post The Ookami (ASX:OOK) share price is up 1,000% today, but don’t be fooled appeared first on The Motley Fool Australia. –

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.

The post The Ookami (ASX:OOK) share price is up 1,000% today, but don’t be fooled appeared first on The Motley Fool Australia.

Should you invest $1,000 in Ookami right now?

Before you consider Ookami, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Ookami wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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