Unfortunately Capital Raisings are a necessary evil for most...

Unfortunately Capital Raisings are a necessary evil for most companies until they become cashflow positive.

Yes much of the time the SP drops to the raise price, but not always. Last year LLL did a placement which all went to Ganfeng it’s project partner - that put a rocket under the share price.

IMO there are a few things that determine how a market reacts to a placement.

1/ The use of the funds, if it enables a project that is good, if it’s just to allow more Admin etc expenditure - say no more

2/ Who it goes to. Worst is a SPP, shareholders will just sell their existing holding to finance the cheaper shares, the SP nearly always ends up at the raise price. Placing to so called Sophisticated Investors is not much better, they are just trying to make a quick 5-10%. Placing to existing top 20 shareholders or other longer term investors is preferred, they won’t just sell at a profit, but are looking longer term. The best of all is a strategic Investor such as Shanghai Jason who took a fair whack of our last placement.

In many cases the market has already discounted the company before a placement. If I look at a new possible investment, the 1st thing I look at is it’s bank balance and average quarterly cash burn. That Minbos has undertaken this placement should not come as a surprise. Even with pending loans - loans are for capex not generally for admin etc.

By the sound of it many investors have been knocked back in this placement. These people will be hoping they can pick up shares at the placement price and they are generally very good at taking shares off unwary investors.

I don’t know the detail, and the markets reaction will depend on the above factors + others I’ve missed. IMO we’re already at a beaten down price, if this placement goes to sticky hands or better still a strategic investor(s), don’t be surprised if the SP goes up.