Ann: Kingsgate completes $46M institutional placement, page-55

Yes your math is correct. The problem here is that there are two market places and we can't do a weighted average between those two markets to determine a value. So which market place should we determine is the correct one, the market that price is tested on a daily turnover of $100 to 200k of shares or a market which is tested by a turnover of $40-$50M in a day?

As an aside, I think we can be forgiven for thinking, after spending time in these fora, that "institutional" and "sophisticated" shareholders are just convenient tags given to privileged and wealthy opportunists who are out to fleece the "Mums and Dads" and "the little guy". In truth, most of these large investors have weight of capital and sophistication such that they employ analysts, or understand the business well enough that they are able to determine a price that is closer to intrinsic valuation. Be assured the company would love to get a capital raising away at a premium to its most recent price. However when it comes to price discovery one is more likely to get to the truth when a larger weight of capital is on the line.

The broader market understands this principal which is why open market prices rapidly to the baseline set by a arge capital raise when they are at significant discounts. It is also worth keeping in mind that the large insto's are quite often composed of associations of little guys, Super funds, managed funds and the like. They represent their hoard of little guys and want to achieve a fair price for them.

The company took the price the capital market determined, it's now up to the company to convince the broader market that its assessment last week of the company's value was correct.