As usual those who panicked have lost their money.
They completely misread the company's intentions.
Had ANL made a one for two placement at 70 cents many shareholders would not have taken it up and Glencore, the underwriter, would have picked up the company cheaply.
Instead, the issue is 14 for 1 at 5 cents each. Exactly the same result as 1 for 2 at 70cents.This values the existing shares at about 35 cents.
Existing shareholders have far more incentive to subscribe and protect their interest because , after the issue, when trading begins in the new shares the 15 new shares will probably trade at 8 cents.
The old share at 35 cents the14 new shares at 70 cents cost 105cents But trading at 8 cents each or $1.20 total
If the shareholder does not take up the issue then and only then his share will be worth 8 cents.
