This is true Chris. No argument. Considering where the SP has been in recent times, getting another round of cash on board to fund drilling with underwriter assistance is a good result.
Yeah, ok @ $3 a pop it's not a huge discount. However it's pretty much in line with some of the other ones that I've seen recently. (7.1% dilution : 7.1% discount is nice to see. It doesn't always happen that way.)
Fact is though, I'm not a client of any major institutional dealers. Thus, is it fair that their clients get access to this discount whilst I do not?
This issue I find rather frustrating, because over time if your a long term holder like I wish to be, you are continually being diluted out and have to go 'on market' to reclaim ownership percentage. The fact that I have to go on market isn't fair in itself because I will experience transaction costs. Those getting the placement will not.
I understand the reasons behind it and sure they make sense from a business perspective. You have to keep the cost of capital down, these placement methods are effective at doing this.
I quite like the method that NXT used in it's last raising whereby it was a mixed insto/retail offer. Have a look into it, I think that you'll agree that it achieved the financing goals the company needed and did it at quite a low cost overall. A bit fairer in my opinion.
At the end of the day, I would have bought an extra 7.1% @ $3.00. If supply and demand controls markets, then how come the opportunity to recognise my demand isn't able to be noticed without having to be an institutional client?
Cheers.
Josh
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