Exciting prospects but with added risk

OMIP (One Media IP) is not a company I've written about before on my blog, but I have briefly commented on ADVFN.

https://uk.advfn.com/forum/search?q=michaelmouse&post_poster=on&post_post=on&index=posts&thread_id=28458514

I bought into this micro-cap at prices around 3.5p, and took my original stake off the table when the share price doubled in a very short time frame. I've left the profit to run for the long term. The re-rating was chiefly due to a return to profitability and cash flow generation and significantly aided by "so-called" heavyweights Michael Grade and Ian Dunleavy joining the board of Directors.

The company appealed to me because of it's lowly valuation at the time, alongside it's past ability to generate healthy profits, cash flow and pay a dividend. It was also debt free. All the signs were that after a temporary hiatus OMIP was returning to growth which has now been confirmed by recent results. A lovely, overlooked little company in other words. I took out my original stake after the share price had doubled simply because I couldn't see how they could significantly ramp up growth without a larger war chest.

All that changed yesterday with an over subscribed fund raise and debt financing which will enable the company to acquire the rights to more valuable music catalogues that they can then monetise.

https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Proposed-Fundraise-of-a-min/78169362

https://uk.advfn.com/stock-market/london/one-media-OMIP/share-news/One-Media-iP-Group-Plc-Results-of-the-Placing-and/78174779

This is an exciting development, although with added risk because of the debt funding. However, with the expertise they have available, I can imagine that any purchases will be very prudent and have the potential to significantly enhance earnings in future. It's also worth keeping your eye on their TCAT services sales which are used to monitor music conflicts and potential copyright infringements. Sales are in their infancy but there is excellent potential here also. The placing price of 6p announced yesterday was disappointing but only in the context of the recent share price, and my remaining holding is still 82% in profit and a "free" ride. OMIP will now be a very long term hold for me, and will hopefully offer significant upside from here, but as ever DYOR.