I've also had to be brutal with two of my long-held stocks. I've sold my last vestige of Redflow on the basis that as I'm not prepared to stump up more cash for the capital raising (i.e. I don't see that as the best use of my money) the clear implication is that it's not the best place for whatever value is left in the stocks I already held. I must confess that I have a deeply pessimistic conviction about Redflow. This is not a company with a successful, revenue-generating early-generation product rolling out of a factory now wanting to gear up for the new generation. The company has worked on the Thailand plant for years without ever getting it into full operation. On top of that, in spite of many customers wanting to want the product, it clearly hasn't stacked up in operation. And now, the company is inviting us to believe that they will suddenly become competent at implementing the new technology.
I have no specific knowledge relating to this capital raising, but a company whose own investors won't support it and who can't engage new investors (i.e. place the shortfall) has only ugly funding options available. Convertible notes are more common than straight out loans, but both will come with a ruinous interest rate of 12-15%. They will typically come with terms that mean there is no early repayment option. And convertible not issuers sometimes stipulate that they are to be paid out in the event of a subsequent capital raise. If the CR fails, it's unlikely to lead to anything good for Redflow.
(20min delay)