I think this will continue to drift down towards 40c until the new share issue is concluded. The reason I think that is the way the issue is structured. Retail investors can't apply for more than their entitlement. Obviously there will be a big shortfall. The shortfall will be taken up in an institutional bookbuild once they know how much the shortfall is. If you look at the entitlement booklet, you can see that this bookbuild is scheduled for 23rd July. On that day, instos will bid for the left over shares. They want the share price to be as low as possible on that day, because anything they pay above 40c goes to the retail shareholders that didn't take up their entitlements. They would rather get the shares at, or close to, 40c. I don't own any, but am looking to buy at around 40c, and expect to be able to do so in about 3 weeks time, if not before. It would have been better to allow existing retail shareholders to apply for more than their entitlement, rather than holding a bookbuild that only advantages instos. Its poorly structured (at least from a retail investors point of view). DYOR.
FKP Price at posting:
35.9¢ Sentiment: LT Buy Disclosure: Not Held
