The company make frequent reference in the Annual Report - to dilution associated with the ATM. They present the case, that the ATM has been well handled, (by the company). But I think they miss the point....regardless of how well the ATM was handled, or not.
Indeed Rich&Poor - you also reference dilution, in the above post.
I don't have any problem with new shares being issued to raise cash - the problem is retail investors - exactly the case with the new ATM shares, buying into positive news. Not always, but very typically and often - these buyers are traders or weak hands, who lack conviction especially when it comes to "buying positive news" - and maybe in a company they have not previously heard of. These shares only too soon come back on the market - as traders look to move on (profit or no profit).
That is just the way the stockmarket works. It is plainly clear from the chart - Taking losses - so on, and so on - after each ATM new shares issue. Disenfranchises the company to the market and these new investors/traders.
The ATM - with the issue of new shares, absolutely accentuates the problem with traders wanting to get out. It is plainly clear - - the extra shares sort of double down on selling pressure.
( In the Annual Report - they make reference to no more than (only) 5% on any one day of the shares being sold - coming from the ATM facility. That is not correct and I question how a mistake like that can be made.)
Perfect example of the active role of traders after that quick buck - was the night, our time, when the Memorial Sloan announcement was made with the results of paxalisib and radiation study - about 12 m shares traded that day over there, when in fact - there are less than 4 m shares on isuue. 1.8 m ATM new shares that trading session, were issued.
------------------------------
So the answer to avoid where the ATM has taken us and to remove this abomination -
- even now, even now - (if no Japan deal is possible) - issue more shares, to a longer term committed investor.
Somebody unlike Quest Aust who scoped up their shares at Company placements - and promptly sold some shares, as soon as the SP went up.
----------------------------
So how to find such an investor, who will contract to no selling for 18 months - well I can do it for them, or better still maybe the US based staff can move in that direction.
Vast amounts of committed capital is available and happening in the US now - for private company new cancer drug start ups. Can you imagine the reaction of these experienced groups, when the company fundamentals behind Kazia are detailed, and the current value of the company. It would be priceless stuff.
See at bottom -details of an agency who can provide access to cancer start up investor types - but that it not required, for a half savvy person when you are selling a "goldmine for peanuts. "
Work has to be done by the people at Kazia. Changes need to be made immediately. This is NOT a difficult task, coming off a US$25m market cap, to greatly improve things. The ATM overhang MUST be removed. Its up to the company to act now to do just that.
----------------------
“When we raised our newest round, PitchBook played a big role. We could quickly find the right investors and access the information we needed to reach out.”
RAGER JONGEN, ASSOCIATE, DN CAPITAL
PitchBook's Advanced Search
With our advanced search, you can easily zero in on the companies that matter most - all based on the criteria you choose. Stay high-level or leverage granular search criteria to sort through our data and generate a tailored list of the companies that you're looking for
Expand
