All good points, but normally in a CR the stock goes to around...

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greyhounder

346 Posts.

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16/01/18

17:51

Post #: 30350180
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Originally posted by butcherboy ↑

I think you're clutching at straws now GH. My reasoning is as follows:

o The majority of the placement, $282 million out of $361 million (78%) is to Toyota Tsusho who are not in the business of selling shares, so those shares will be held and not sold on the market.
o The retail component of the placement is only $79 million (22%). $79 million in new shares for a company with a market cap of $1.5 billion is only about 5%.
o Any retail shareholder who doesn't want their placement shares can sell their entitlement rights on the ASX rather than sell FPOs to buy back in at a cheaper price, so there will be less incentive to do the latter.
o The quarterly is excellent. The presentation is excellent. All indicators are up (production, revenue and margins) and the brine issue has been resolved.
o Only US$6 million required from ORE in equity funding for the Japanese LiOH plant, with "operating costs down to approximately US$1,500/tonne from US$2,500/tonne".
o The Olaroz expansion has been increased from 17,500 tpa to 25,000 tpa, something the market wasn't expecting. That's an extra 7,500 tpa (including the 25% improvement to market price guidance for 2018) that has not been priced into the market cap of the company.

Sure, it could go down to the retail placement price, but given all the good news, and the way these deals have been structured, I really don't expect it to.

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All good points, but normally in a CR the stock goes to around the raising price AND the market hates being lied too!
Time will tell

ORE Price at posting: $7.17 Sentiment: Sell Disclosure: Not Held
2 Upvote

0 Great analysis

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