equity raising, page-87

TC - you seem to have missed the fact that you now have rights to purchase shares at below market price. Your shareholding + rights is worth pretty much what it was pre announcement. At the risk of repeating myself:-

Shares on issue now - 76,123,000
Market Cap - 42,600,000
Share Price pre cap raising - 56c

Shares issued - 36,159,751
Cash raised - 12,655,913

Revised Market Cap - 55,255,913
Revised shares on issue - 112,282,751
Share Price after cap raising - 49c

This obviously doesn't include the value to the company of having $10m in the bank


Certainly not Tony! and I will explain yet again:

1. There now will be 50% more shares on issue. TZ will have to have earn greater net earnings for us to reach our individual TZ portfolio value targets. This is nowhere near counteracted by the 'opportunity' to increase our shareholdings by 33% also considering that we have to part with more cash to avoid even greater dilution.


2. The cash. Yes you have left it out, and rightly so. The thing about cash raised is that it is very difficult to attribute a value to it. This is why some companies trade at not much above their cash backing, whereas others get rerated upon a capital raising. During the GFC, some companies traded at below their cash backing! It all depends on the what the market believes the company will achieve with the money


This brings me onto my next point. Some here may believe that this is it. Final capital raising - Yahoo!, we're away, and the market may agree. Then again, the market might look at the progressively lower and lower capital raisings by TZ, and decide that there is a risk that the next capital raising will be at 25c, and therefore decide to value TZ even lower. Only time will tell on this point, and it is upto TZ to now demonstrate that this money will be very well spent.

By the way, the above is commonplace in many spec companies, and I call it a dilutionary death spiral. It happens where a company can't deliver results quick enough earnings to prevent ever increasing amounts of paper being issued. In the end people walk away from that company. I'm not saying that is the case here, but it would be foolish to ignore that scenario.

Anywyay, the board may not have much of a choice to raise the money at the price they are and in the manner that they are. But wasn't this writing on the Hotcopper wall a few months ago?