Thank you juggernauts for you insightful commentary.
There are two questions to answer - is a time like this beneficial for a stock being suspended and is a discount representative of poor strategy (i.e could we have got more per share).
Firslty, the timing. In poor econoimic climates, the worst ever outcome of capital raising is under subscription. In fact in that instance the price can fall below the discount rate. Therefore, management have to pick an opportune time in a financial crisis where interest is high - to raise cash. Currently its far over subscribed therefore AGO gets a tick on this one.
Secondly, I have no doubt that we could have been given a higher rate if 1) the company waited or 2) less discount was applied. Though sophisticated share holders are one of the greatest assets to a companies resilience and growth potential. Giving them an excellent deal means that they are less likely to reassess their position in the future. Companies statistically will bailout of ventures before positive cashflow beigins if the current sp is below issue as it would therefore present too greater risk. This is predicated on the unlikely event that the share price was to fall below issue. Highly unlikely.
In summary, you are correct in saying that traders did not get the value out of the last few days, though unfair to say that it wasn't a wise move on the companies behalf.
AGO Price at posting:
$1.70 Sentiment: Buy Disclosure: Held
