But for us retail investors. This is the exact reason why a wealth gap exists, the exact reason there is severe wealth inequality that only worsens in our nation.
The capital raise is a good thing, it shows that management and high net worth individuals are reasonably certain that ECS will appreciate in value.
BUT, consider this. You have $10k holdings at 2.5c, that is now effectively worth $8,400. That $1,600 has been ‘donated’ to those institutional/sophisticated investors so that they can join the party. Let’s fast forward to the market cap reaching $500mil (SP of 38c), you now have $152k worth and gained $142k in profits from this phenomenal investment. Everyone is happy. But, what could you have made without the raise? Well, let’s say that the market cap gets to the same level without dilution, you would have stood to make $182k (172k profit). If we didn’t need to cap raise, which from my view, is not needed, we all lose out and everyone entering the cap raise wins.
So how does this benefit you? Well it doesn’t. We all lose 21.1% of future profits so that these already wealthy individuals can profit in the future. This capital raise is a textbook scam, it’s evidence that ECS know a their future potential and have decided that their own and friends best interests sit above yours.
Oh and get this, things get even more unfair when you realise that those high net worth individuals also own multiple negatively geared properties. So whilst you’re stuck paying your capital gains tax in full, they get to write off their tax bill against their investment properties. So, as a young and prospective investor, Australian tax law is cooked, wealth inequality is raging and those publicly traded companies that make you (me) believe that we invest for future wealth take that as an opportunity to rip you off. Whilst their wealth disproportionally increases and you get dragged along with them.
I’m having an angry day and I believe that the scumbags that operate these publicly traded companies take retail investors knowledge and awareness for granted. We aren’t stupid, but we let ourselves be stupid enough to not realise just how greedy you are. I like making money as much as the next guy, but skimming the damn cream off my milk does my head in. You think you are into a winner and the board steps in and says “Wait a minute, I don’t want some stranger buying shares on the open market to make all the money, they’ve literally done nothing, how can me and my mates make more money out of this?” And it’s true, I didn’t invest capital directly into ECS, I haven’t stepped foot on their facilities. But, publicly traded companies have shares because they made a trade with someone a while ago with other capital raises, you give us cash and we give you a share of the profits. Someone who put cash in decided they didn’t like the look of it and passed that share onto me, at a discounted rate albeit. This share issuing and capital raising usually ceases once they are operating at a profit, then YOU get the benefit of a dividend and profit sharing. That’s the intention, not the outcome. ECS have some serious but raising when they did not have to. We could’ve seen organic growth at a manageable level, seen profit distributed for being a shareholder. But instead they make up some nonsense about expanding facilities requiring additional funding so that these profits can be split between you and whoever they feel like inviting.
I’d absolutely love to be involved in an ASIC investigation, seeing who gets allocated shares here, seeing personal relationships or kickbacks.
I am beyond infuriated. Unnecessary, Greedy, Arrogant.
ECS Price at posting:
2.5¢ Sentiment: Buy Disclosure: Held
