In Dec 2017, they raised at 20c with a comparable pre-offering share price. And now suddenly a placement at 15c. Percentage-wise this is a huge difference and very disappointing.
What a bad deal for current shareholders. They have had plenty of time to prepare a rights issue while everybody was sitting around for months and waiting for the drilling results to come in.
Morgan has two seats on the board and as long as this is the case, they will be milking this cow and continuing to raise money and charge 5% every time. With two seats on the board, they don't even have to compete for the business and can just pocket $1 million for a couple of days work.
Unless the Clarkes leave the board, this will be an endless story of dilutions for existing holders.
Also, why two seats on the board? How does the company even remotely benefit from having two people with the same skillset (from the same bank which is making millions every year from these placements)? You need diverse skills and industry expertise. And from a corporate governance perspective you need an arm's length principle so that the board members are looking after the interests of the shareholders - and not their own.
FDM Price at posting:
20.5¢ Sentiment: Hold Disclosure: Held
