I appreciate your valuable input Justbyanose
My 2c
I googled Italian capital gains tax laws and could find nothing relating to a requirement to pay tax on unrealised capital gains. Happy to be corrected if it is true but I could not find any evidence and would be very surprised if this is the case. It also does not decrease dilution, the business doesnt get any extra cash due to the director sell down, which is the purpose of the CR - raising cash.
Fact is directors hold ~382m shares in Vection or ~37% of the business. This magnitude of alignment with shareholders is MASSIVE and a sale of 15m shares is insignificant and understandable.
I'd suggest, as TenX said, directors had a meeting on the weekend following the news of the new covid variant and the result it had on global capital markets, they were spooked and figured with the share price run up now is a good time to shore up some cash in case of extra investment being required or an acquisition opportunity. This emphasis on the metaverse from Facebook (Meta) is generating a lot of investment in vr tech from all sorts of businesses. Vection is a short term beneficiary of this because some of the capital flowing into VR tech is flowing into them, ultimately I think in the long term they will also benefit as they will be able to provide a lot of value to the majority of businesses who come to vection looking to add value to their business using VR. So they have been quietly building a portfolio of VR products and partners and then this wave of investment in VR has come along and as we have all seen Vection's contracts and revenues are exploding. This is not the time to be focusing on positive cash flow. I think it is super positive for vection that they are scaling so well, controlling costs, trending towards breakeven. I personally like to be able to see a path to breakeven so I can model a companies profitability and intrinsic value, but now is the time for Vection to be marketing themselves aggressively, writing case studies on value creation to feed to sales, pooring labour into customer success, accelerating development on all their amazing new products, etc etc. spend the money to continue the explosive growth and make as much of it as possible stick when the metaverse gold rush subsides.
So GO said they dont need to raise capital. Not needing to raise capital and not wanting to raise capital are two different things. They say they don't need to raise capital because (aside from being true) it puts them in a stronger financial position, from which, they can actually raise capital if they want to at a higher price than if the market thought they NEEDED capital. A lot of businesses who dont need to are raising capital at the moment (DSE and PLY comes to mind for me as they are big holdings of mine, playside is also looking to take advantage of the boom in metaverse related to gaming and were profitable before IPO, dropsuite made it to cashflow breakeven, shareprice pumped, and they raised capital for acquisitions). I suspect there is a common fear amungst asx company directors that this could be the top for capital markets.. that is speculation however lots of uncertainty makes it a good time to have a healthy cash balance.
15m shares is nothing for them to sell down, 60m shares dilution is nothing vs 1042m shares on issue and nothing compared to the opportunity Vection has in front of it.
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