big seller, page-17

Jxscul

I think more often than not SP gets hammered, and often merely on the expectation of a raising as is my point with MEY.

There were some noteable exceptions, for sure. Your WME example occurred in a strongly rising market which is not the case today.

Yes there were some amazing opportunities in early 2009 to buy blue chips at a substantial discount through issues and SPP. I still recall BSL selling unlimited shares at $1.55 at the time they were pretty firm around $2.50.

I also agree with you that after the raising, price tends to rise due to having cash and at least the possibility of another raising removed.

Closer to home examples. Latest raisings, from memory:

UNX (African uranium explorer) - hammered from 37c to 18c with rasing at 20c
NMG (mainly African gold explorer) - hammered down to 33c so far with SPP at 30c
BVA - raisng at 10c, sitting at 10.5c (from mid teens)
MGR, SPP at 1.35, SP at 1.31
CPA issue at 91c recovered now to 94c
ARU - issued at 60c or thereabouts, shortly after announcement went below this price and now is well under 50c.

Yes, a volatile market has a lot to do with this picture.

There is almost always some SP drop even if everybody takes up their entitlement. Mathematically, for example, after 1:1 issue the new SP should settle at (SP+IP)/2, where IP is the issue price. So if MEY did a fully taken up 1:1 issue at 10c, and the old SP was 12c the new fair SP will be 11c. What is worse, if the placement is to a trigger happy insto, the new shares flood the market for a while (check UNX, for example).

Anyway, we will see how it all unfolds.

Lets hope you are right and I am wrong

Cheers