I wondered if the reason for this surprising share price fall is that part of the acquisition of LR Instruments was cash and part was equity, and that the previous owners are now selling some of that equity into the market.
In the announcement on 13/11/13 the company stated that the acquisition price was $5.3 million "funded by a combination of cash and equity".
In the quarterly announcement on the 31/1/14 the company stated that " The total cash consideration for the acquisition amounted to $3.7 million".
$5.3 million - $3.7 million = $1.6 million in equity was allocated to owners of the acquired companies.
Assuming that was allocated at $0.37 cents, the same as the placement price at the time, then around 4,300,000 shares were allocated.
If the owners of the acquired companies wish to convert that equity to cash then those shares are now overhanging and are possible the reason for current fall in the share price.
What do you all think of the theory?
I think it's a great opportunity to buy the company personally!
PGC Price at posting:
31.5¢ Sentiment: Buy Disclosure: Held
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