It's all very interesting the discussion around the CR dropping the SP etc. At the end of the day we can't establish if there is a direct causation or merely a correlation here.
The fact is the SP is where it is. Today is the closing date for acceptance of the new share offer.
I would assume that IMC has some confidence in the company given they continued to increase their holding in MOY since the acquisition of LinQ, and the fact they are underwriting the CR.
They will get the first shot at the shortfall, read section 2.5 of the prospectus (priority shortfall amount being $3.25 million, of which $1.87 million will be their own entitlement).
Therefore before any new shares are allocated on a 50-50 basis with IMC they get a shot at $1.38 million worth of shares in shortfall or 4,312,500 shares.
Now I believe the CR has had an impact on SP, however the cause needs to be looked at closer than just saying CR always drops the SP. I look at the situation and question who would benefit most from little or no gap between the CR price and SP price?
For a couple of weeks there was constant selling pressure on low volume pushing the SP down, last week we saw comparatively high volume again selling.
The 2 - 21 share offer is unlikely to have pushed small holders to sell their holdings to buy in again, are there many of you who did this, as I could be wrong??
I have taken up my full entitlement and have applied for the full amount of new shares I'm eligible for, however I expect to see very little in the way of new shares if any. IMC will certainly increase their holding through the CR.
I think managements decision as to the underwriter in this situation is questionable with respect to the long term position of MOY, and to some extent the short term SP movement.
Anyway just my thoughts, DYOR.
Cheers,
JB
MOY Price at posting:
32.0¢ Sentiment: LT Buy Disclosure: Held
