I've just read the thread and can see your point. You explained the terms quite clearly, thanks for that as I had a few bits of information missing when getting my head around the deal.
But I really don't know if this is such a bad deal COMPARED to a traditional cap raise.
Lets put the other scenario - A traditional cap raise for $46mil.
I haven't calculated the VWAP, but the price at Announcement was 3.9c, so we can work off that. With a 2.5% discount to Insto's (if we were lucky) that brings the share price down to 3.8c (rounded down).
To get the $46m (up front) we would have to issue a further 1.21B shares, then with the usual 1-for-1 option incentive which would put another 1.21B worth of shares on the market. Thats a total of2.42b sharesfrom a traditional cap raise.
I only say up front because I imagine IMU probably don't/can't want to wait 2-3 years for the options to come through (if they ever do). The above scenario could always be changed to suit the current funding split $20m then $26m.
Either way it's a shit load of shares put into the market ripe for shorting. So whilst you have a point to the negative scenarios that may arise from the current deal, any other cap raise would have the same effect IMO.
IMU Price at posting:
2.3¢ Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)