No, but seriously, @dolcevita, listen to yourself.
Plus we have the cash from the IPO. I don't think your analysis included it.
Just re-read that for a minute and register what you are saying.
You are criticising me for failing to include in my analysis a capital raising amounting to 8% of the then market capitalisation of the company, conducted at a 34% discount to the then market price.
Imagine the following:
Imagine - before trading halt for the capital raising took effect - me coming onto HotCopper one fine day and saying,
"Hey folks, Pain in the arse Madamswer here, just keeping you all abreast of my latest thinking on Mesoblast.
Here's what I've decided to incorporate into my financial model for the company.
I've decided to include a capital raising, involving the issue of US$69m of new shares (but fees will gobble up US$10m of that, so I'm forecasting US$59m hits Mesoblast's bank account).
And you know what else, I'm assuming that the issue price will be at a discount, to the last traded price, of.... wait... for...it.... the discount I'm using is 34%!
Yes, that's right. A thirty four per cent discount."
How on earth would that work?
Like I said, its another "Dolcevita Doozy", for sure.
PS. When you say, "Plus we have the cash from the IPO", yes, but with that comes the additional shares that have to be serviced to perpetuity. Meaning that the new equity capital forever has a claim on the assets and profits of the business.
You make it sound like its simply free cash.
My sense is that you have no idea that all capital bears a cost: with debt capital that cost takes the form of interest that needs to be paid. But with equity capital the cost is somewhat less tactile, and to the unsuspecting investor it may seem to be totally invisible, and therefore thought to not exist.
But in many ways equity capital is more insidious than debt capital, because debt capital is readily measured and observable, and therefore can always be retired, if circumstances allow it.
But equity capital just sits there and levies its silent charge forever.
You seem to be blissfully unaware of this.
You seem to think raising equity is just about the "plus of having the cash".
Which probably explains why you lay blame for the share price woes on the wide array of conspirators, but never on the succession of equity raisings that have been conducted over the years at ever-decreasing share prices (and thereby, increasing cost of equity).
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