The RC365 Holding (LON: RCGH) share price is up another 35% on Thursday. RCGH is rising on the back of - apparently - a deal to distribute branded Mastercards in Hong Kong. We are, ourselves, market absolutists - prices in markets are what markets say prices are. Therefore this current 157p price for RC365 Holding is the correct one. It's possible to buy and sell either side of that price and that's that. On the other hand we also - because we're market absolutists - insist that prices will reflect objective reality. Even if it takes a bit of time and involves the odd detour or three. Which is where we are with the RCGH share price right now.
We cannot see that this price is objectively sensible in any manner at all. Recall what the latest driver is at RC365 Holding: “Now think on this for a moment. At that 60 pence - before this latest announcement - RCHG had a market capitalisation of some £60 million, give or take. After the announcement it's at £120 million (actually, £118 million). So, the additional value from this announcement is £60 million. That's applying a valuation of £20,000 to each credit card issued. That's absurd.” Since we wrote that the valuation has changed. There's now an additional $100 million (about) added to the RC365 Holding market capitalisation on the announcement of a deal to issue up to 3,000 branded Matercards.That puts a valuation of £33,333 on each card issued. Note that's got to be the capital value of the profits generated - not the amounts spent, but the profits generated from the affiliate fees. That's an absurd number.
RC365 Holding share price from London Stock Exchange
We would also note that earlier leap and fall back in the RCGH share price: Then, as more became known about RC365: “Now let's recast this RC365 Holding idea. RCGH is being paid some £1.5 million to write a wealth management app for an £8 million a year turnover company. It's also just an upgrade to the extant product. This collaboration, this contract, has added £80 million to the market capitalization of RC365 Holdings in London? No, we do not believe that this is a rational reaction, nor do we believe it's a justified one on the substance of the deal. “”
We agree, prices in markets are prices in markets. But we also do insist that objective reality gets a look in sooner or later. We do not believe that the RC365 Holding share price is going to stay up where it is all that long.
