Originally posted by sinic
10% discount is optimistic. This is how I would see the conversation going:
Corporate Advisor: "Hey fundmanager, wanna put $10m into Brainchip?"
Fundie: "Got any revenue?"
CA: "Nah..."
F: "Going to?"
CA: "Dunno, can't trust the CEO"
F: "How are you spending the money?"
CA: "Well, at least 10% goes on Board wages, the rest probably towards building our new product for later in the year"
F: "Ouch. So what happened to the last lot, I thought you had sales coming"
CA: "Yeah, long story, one client's not paying and one is under takeover so dunno what'll happen there. The rest are hiding behind NDA's"
F: "Hang on, did you say new product? Last time we spoke it was supposed to be finished by now!"
CA: "(
mumbles, looks down, wipes forehead) How's that local sporting team? The wife?"
F: "Reckon the Board will buy any? Looks like they have a bit of skin in there already, what did they pay?"
CA: "Ummm, well, they didn't pay for those, they got them free for *cough* performance *cough*... so, I'd say, probably...definitely...not..."
F: "Is the share price trending up?"
CA: "Next question"
F: "Is the Board solid and supported by the shareholders?"
CA: "Probably all going to get rolled at the AGM in a few months on their second strike against pay. Already got a strike at the last AGM, didn't take any pay cuts then, in fact, well, CPI means they will probably be lining up for a pay bump again, so if you have any Board members you want to nominate as well..."
F: "What's your share register look like, lot's of funds and tech investors in there?"
CA: "Hmmm, no, but did you know that if you were the first to buy stock in Microso..."
F: "Alright shut-up, this is probably a hard pass from me, but what are the terms, just for a laugh?"
CA: "10% off VWAP?"
F: "Get out."
CA: "20..?"
F: "It would have to be closer to 40% and even then I'd want some free oppies"
CA: "Well, I'll have the paperwork drawn up, actually, here it is, let's do it now!"
F: "I'm going to lose my job for this."
CA: "Yes, but there is a Board seat if you want it. Wanna underwrite the share purchase plan?"
F: "I have a gun".
You are giving the investor too much credit here I think.. Probably more like:
- F: "Hmmm spec stock with low volume and low market cap, we can work with this. Got any fluff announcements up your sleeve that we can pump and dump the stock on, hoping to make a quick 50% here".
- CA: "We specialise in fluff announcements, we once released information about a casino trial that saw the stock rise 300% in the coming weeks"
- F: "That's all we need. We can work with this"
(20min delay)