Mesoblast, page-9

Madamswer

You had previously said the following in a previous post. See below.   Therefore you should be praising MSB latest rights issue to its shareholders. And maybe it is so that the shareholders can get some more discounted shares before some major news or partnerships are announced. Rewarding its loyal share holders.

"In MSB's case, there is a lack of clarity and transparency; for example,

Why is it said that capital will not be raised an a basis that is dilutive to existing shareholders, but then that ends up happening anyway?

Why are announcements made about having arranged an "equity finance facility" , but then capital is subsequently raised via discounted, selective placement anyway?

In fact, why is there continued reference to such an equity finance facility as a "funding option" when, in reality and for practical reasons, it is never going to be called on?

For that matter, why is capital continuously raised via selected placements to new investors - who are immediately in-the-money, instead of offering existing, long-term and loyal shareholders the opportunity to participate in the ongoing financing of the business?


Instead of the above muddled narrative, consider the scenario where MSB management simply said (from the very outset, and then re-affirmed it over time) the message that represented the reality; that is, something along the lines of:

"Dear shareholder,

We believe that we are on the cusp of a major, once-in-a-generation, paradigm-shifting breakthrough in medical technology. If we are successful in our endeavours, the shareholder value creation will be significant for many years to come. However, to reach the point where we are able to properly commercialise our Intellectual Property will take time and it will require considerable capital. While we hope to be able to source the required capital from industry partners, we recognise that the more likely source of funds will need to be through accessing equity capital markets as the need arises. However, in doing so, we undertake to raise capital only via fully renounceable entitlement offers to existing and loyal shareholders, so that their value in the company does not get diluted in any way.

Sincerely

Your Board of Directors"


If that was the frank and candid approach adopted, then the entire process would be totally transparent and everyone (including would-be short-sellers[*]) would know exactly where they stood, and would be able to arrange their investing affairs around that.

And then, in the event that any partnership(s) was successfully struck, that would end up being a significant positive development, because the default mindset of the market would have been managed to not expect it.


Companies are far more respected and revered for telling it like it really is, than for the sending out of cryptic and confusing messages.

I mean, as a shareholder yourself, wouldn't you prefer it if there was greater clarity - other than merely "trust us" - around the critical issue of how your company is funded going forward?


[*] For starters, shorters would have to actually buy stock on-market in order to cover their short positions, rather than benefiting doubly by getting allocated placement stock at a discount from their stockbroking mates."