@SIRJO et al, as frustrating as they are you can’t blame the parasites. They will naturally feed whenever food is handed to them (particularly if shares are handed out like confetti & considered to be a gift of sorts).
To avoid excessive dilution, the key for development companies (IMO) is to bypass the parasites altogether, or at least convince them that a small discount or premium will be worth their while. Otherwise, better outcomes are made possible through properly thought out accretive deals with either other cashed-up partners in the same space (see below eg.) or at least long term equity providers who agree to escrow their shares until production & cash flows commence, or are incentivised to hold over LOM in exchange for a small, ongoing royalty (forfeited if and when they sell their shares). There are royalty companies out there that exist for this very purpose, however this type of deal could be extended to anyone who is agreeable.
Now, AVZ’s new European investor may turn out be a good example of a long term strategic partner (only time will tell). However, the so-called parasites - some who may have been on and off the register before - and one as recently as early this year according to my BTD - well… I’ll give you one guess as to what their only objectives have been & what they’re very likely to be again IMO, after the next pump that is.
To attract the right partners, a leader needs to be creative & possess good negotiating & planning skills. A background in sales, marketing & corporate finance would also be an advantage but most importantly, having a solid business reputation as an astute & efficient operator is key IMO, including his/her ability to assemble a team that can confidently state & achieve realistic goals & objectives in a relatively timely manner and on budget. A leader that regularly under promises and over delivers is worth his/her weight in gold.
GLTA
Cheers
Elpha
p.s. I have this savvy business idea to become a lead bookrunner. i.e. a none the wiser ASX listed co. with say a Tier 1 asset, service or product & I agree to publish my dedicated research report (with an ultra conservative valuation) on none the wiser co.s website.
This would be all done say a couple of months prior to settling on a CR price and only once none the wiser co.s company’s cash balance has sufficiently dwindled to the point of raising internal alarm bells, forcing its hand to accept my heavily discounted terms despite the glaringly favourable rising tides within its own sector.
With apparently no plan B (much to the disdain of many but not all existing shareholders), none the wiser co. finally agrees to an SP that is about half of ‘our’ already tongue-in-cheek research report SP valuation. Now, I may be raising an eyebrow or two so far with this seemingly overly ambitious & unrealistic idea.
But please hear me out as a heavily discounted SP would, without doubt, ensure that ‘our’ business receives a maximum placement fee (based on a fixed %) for a naturally oversubscribed book build in the tens of millions. (I say naturally oversubscribed as ‘our’ hypothetical none the wiser co. has kindly provided in advance a list of expected news flow items that will no doubt provide a healthy re-rate in the weeks ahead & definitely please those participating in ‘our’ heavily discounted book build).
So who’s in on this genius (IMO) business idea, and does anyone know of any none the wiser ASX listed companies with Tier 1 status that would ‘surely not’ agree to such terms in a booming market & indeed booming sector?
AVZ Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
