What next?
The appointment of Dr Monil Shah was announced on 10 June. About the same time, the short term downtrend from 49.5 to 29.5 had come to a halt and a consolidation pattern developed between support @ 31 and resistance @ 38.
This lack of direction on low volume for almost 2 months suggest uncertainty because the optimism on the companies 'work in progress' was tempered by unexplained delays of information on that progress, keeping ‘fear’ and ‘greed’ in balance.
During the Share Cafe Small Cap "Hidden Gems" Webinar, on 11th June, LC made a point of saying that there were no plans for CR as existing funds ($30 M) were more than sufficient, so yesterday’s announcement of a CR, without reason or explanation, amplifies negative speculations. (Capital raisings are often just seen as ‘management putting their hands in shareholders pockets’, serving director’s interests).
A quick review of postings on other threads in this forum suggests this may not be the usual ‘topping up the kiddie cause we are running out of dough’ type of CR. I suppose the scuttlebutt is probably reflecting discussion of information in the prospectus/ presentation to institutions, but I cannot verify that.
This 'scuttle butt' suggests:
New shares are offered at a ‘very modest’ discount. (Could not see any reference to the issue price other than that)
One Institution has taken up a cornerstone holding of $30,000,000 worth of stock
References are made (not necessarily attributable to IMU) to IMU joining the ASX 300 by September and the ASX 200 by December.
IMU does not NEED to cash up for funding standard operational expenses; however, they are raising $80,000,000 from institutions and $5,000,000 from retail shareholders, resulting in a war chest of $100 M. Why?
Various scenarios come to mind.
Preparation for takeover discussions? Negotiating from a position f strength provides shareholders a better outcome.
Preparation for a joint venture with an other Pharma to exploit say CD19 ONCOLYTIC VIRUS?
To take advantage of an opportunity to acquire critical technology?
Something else?
Whichever way, I think this will be a game changer of great benefit to LT investors. A “very modest discount” suggests an issue price of 30 c or above. Commentary on this forum suggest a great appetite for the issue, so I expect the support at 31 will not be broken, and the SP will, in my view, break out north, on high volume, starting a new leg up.
Of course, you can never know. Tomorrow will tell. DYOR, GLTALTSH. Cheers, Frits
(20min delay)