Who will sell out for less than what they newly paid for them?
Plenty would. Thats the problem with these SPPs basically open to everyone who has a dollar to buy a share. They don't buy the stock with a thorough understanding of what they are actually buying. They buy thinking they can make a quick buck. When things dont turn out their way and the shareprice drops they panic and sell. Normally who cares, let them sell and move on, but when you have an SPP where the majority of them are in this situation, this causes abnormal pressure on the share price.
The only thing right now is that the shareprice isnt doing that great anyway so maybe there wont be as many as there might have been with the shareprice higher. This is bad for MAK as they will not acquire as much money as they might have. Just think MAK have handled this very very badly. There are much better ways to induce funding than the open slather SPP style they have chosen. On a shorter term basis this has backfired on them and created some scepticism. To me it appears they panicked, which makes you ask the question, why?
I will not be making my decision on taking up my rights until close of Wednesday. At this stage it appears unlikely as there may be the opportunity to mop up shares lower than that in a couple or more weeks time.
AEV Price at posting:
42.0¢ Sentiment: None Disclosure: Held
