Hi Bhan,
in theory you are right although elsewhere I have explained that a significant part of the capital raising was taken up by the advisors Everblu and that by offsetting their fee (3% of the funds raised from memory) their effective entry price could be as low as 1.2 or 1.3c.
Either way that's the theory.
In practice there is this thing called shorting.
The average punter will tell you that the ASX has an approved shorting list primarily composed of ASX 100 stocks and this is all that can be shorted. These are for naked shorts were the approved seller is selling stock he not only doesn't own but doesn't even need to borrow to sell.
The truth though is that anyone can borrow stock (for a fee to the owner and intermediary) and use it to sell down a stock in the belief that he/she will be able to buy the stock back at a lower price at some time in the future. For these people there is NO minimum price - the lower the share price goes the bigger the profit. The danger for them is in fact having the share price go UP after they have sold and before they can buy the position back.
Without going into the infinite details about why the lender would facilitate this (often owning a stock not paying a dividend and a long term holder) - one simple reason is a short term benefit in getting some income from an otherwise income free stock in which they are committed for one reason or another.
I'm not sure if its still possible but I used to have a broker that would allow me to short ANY ASX stock in any volume as long as I was square at the end of the day. Makes you think about what you sometimes see on your trading screen doesn't it. And I do mean any volume. We could turnover percentages of the total issued scrip in day if the conditions were right.
Cheers
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