surprising price surge, page-2

This rights issue, assuming it raises the maximum amount ($14mill), will only buy AVX a couple of extra months. It is far too small to fundamentally change AVX's predicament. And this is the problem for AVX; there is no way the company can reasonably raise the required funds from the market. Partnership is AVX's only option.

Obviously, the company does not feel it is close to signing any deal, or it wouldn't need to attempt this rights issue. So the rights issue is probably AVX's last throw of the dice. But I have my doubts it will get anywhere near to full subscription. So I think AVX still only have a few months to a deal before administration. The key question for shareholders is when people are going to start to smell death and bail.

There is substantial upside from these levels if a deal can be done soon. But there is also the real possibility of shareholders losing 100% over the next few months. So AVX is definitely a high-risk play.