cetra
You ask: "
Is anyone actually going to take up this offer?". Of course, that's a fair question and the following are my considerations, that I will take into account when making my decision by 24 May:
1) If the SP remains below, or at, or even a point above the offer price, I won't be participating in the capital raising.
2) If the SP was to increase several points to, or a little beyond 2.2 cents, with any reasonable support, I would probably take up a minority of my entitlement.
3) If the SP was to increase a few points beyond 2.2 cents, with any reasonable support, I would probably take up a majority of my entitlement.
Now, I will concede that the prospects for
scenario 3 above look quite implausible and I would be astonished if that came to pass in the next 19 days.
I will also concede that the prospects for
scenario 1 above look very probable, but if it does come to pass, I think there are other reasons why the capital raise might still succeed (more on that later).
So that leaves
scenario 2 above - the prospects for which do seem a bit unlikely to materialise by 24 May. However, at this stage I am not prepared to count the scenario out for these reasons:
- Bits and pieces in several recent ASX releases from Spectur have indicated that there are a number of large (mostly material) opportunities which are expected to soon convert from the sales pipeline into contracts. Of course, the company has been saying that for a while, but I would expect that the timing of the capital raise would have been calibrated to coincide with management's best estimate of when some of the larger opportunities might convert.
- The company has said that all of the more than $12 million worth of opportunities in the sales pipeline have a potential contract value of greater than $500,000 each. So, if some of those opportunities were to convert in the capital raise period, it may paint a somewhat different complexion for trading sentiment and the share price.
Turning now to why the capital raise might succeed (from management's perspective) even if
scenario 1 above pans out, I would be unsurprised if there were some "johnny come lately" investors with a decent cash wad who may see the capital raise as a means of establishing what in historical terms could be considered a sizeable and cheap position in the company by hoovering up any capital raise shortfall. Here, I'm talking about a potential shortfall of many millions of shares which could not otherwise be accumulated in such amounts on market at 2 cents per share. Of course that won't bring particular joy to longer term investors like myself but I can't discount the possibility that that may pan out.
zeno9
(20min delay)