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skyscraper99

1,312 Posts.

29

20/10/15

21:11

Post #: 16216084
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Originally posted by BobbyKennedy ↑

So all things remain equal. The SP is 3c pre-con so it's 9c post-con. The SP triples and the shares on issue split by three (33.3%).

The market cap doesn't change.

But... 300m new shares hit the market as well (post-con shares). So take those 300m shares and multiply them by 9c. That equates to $27m. That means you can add $27m to the MC on the day the shares hit the market.

Is the company worth an extra $27m? No. They have received approx $3m in cash from the placement but that certainly doesn't justify the new MC (increased by $27m overnight).

The market has a way of balancing out. So to get the MC back down to where is was before the newshares hit the market (where Mr Market determined was fair value) the SP needs to contract.

How can you possibly argue this?

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Bob
Do you see where your figures are wrong,
If not I am happy to step you through it again,
100 mill shares post consolidation, $8.1 mill at today's price times 3 minus $4,5 mil, cash in bank,

AWD Price at posting: 2.7¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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