Ann: Trading Halt, page-27

I understand your point. This is what I mean from a corporate finance perspective:


1) dilution is only 10% of issued capital
(this is how much your claim to the company assets are reduced ie. not half).
2) capital raising adds $20m cash which is making the dilution less than 10%.

In a simplified calculation, let's assume that the net loss of value to existing investors is closer to 5% (from a corporate finance perspective).
5% loss for THIS placement - but it adds up when doing it every few months!!!

Whereas a large cap with plenty of analysts and institutional investors would see a modest share price correction of 5%, a small cap like Freedom could see the share price get absolutely hammered. And that's what seemed to happen when news of the placement apparently started leaking.

If the Clarkes hold 20m shares before the placement @ 25c = $5m value.

So they would lose 5% of $5m = only $250k.
That's a lot less than the $1m they made on the placement...

Also, do we know that they're not participating in the placement?
The placement is happening immediately after announcing the quarterly results so no restrictions on directors dealings?
Possibly $1m in fees for the placement and buying shares on the cheap.