CLB 0.00% $1.10 candy club holdings limited

Ann: Suspension from Official Quotation, page-14

  1. 161 Posts.
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    Sorry but that's not how you do the math on this, they are getting $10m for their equity at a 4.5% discount

    You would assume the market capitalisation increases at least by the cash raised (sometimes even more if it brings opportunity/removes an overhang, see my points below)

    A simple way to think about it is 15% of your shares (~$10/$70m) have been issued at a 4% discount
    15% x 4.5% discount = 0.60% discount on over all stock

    From the internet:

    https://www.trignosource.com/finance/TERP.html#:~:text=TERP%20is%20therefore%20the%20weighted,and%20the%20rights%20issue%20prices.&text=The%20current%20price%20of%20a%20company's%20share%20is%20.,a%20rights%20issue%20price%20of%20.

    After a right issue, the number of shares increases and obviously the market capitalisation would increase too. So, the price of a share after a rights issue can be calculated as follows:-



    The other thing you need to think about is what the additional capital brings to the company
    1. removes overhang of a capital raise completely.
    2. has major serious instos join the register who will keep on buying
    3. comes with a 7.5m debt facility which is news in itself ie you're getting $17.5m in capital to GROW.





 
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