If ELM raised $50m at $2.50 we would issue 20m shares. Issued capital would go from 160m to 180m or +12.5%
If we raised $50m at $1.75 we would need to issue 28.6m shares. Issued capital would go from 160m to 188.6m or +17.9%
Thus to reach a market cap of say $500m, under the first option the price would need to be $2.78 (500m/180m) To reach the same market cap under the latter option the price would only need to reach $2.65 (500m/188.6m) The difference between $2.78 and $2.65 is 5%.
Thus, the more shares we issue at lower prices the lower will be ultimate price at any given market cap.
This is a hypothetical example only; issued shares are approximate and price levels are purely hypothetical.
K2P Price at posting:
$2.08 Sentiment: Hold Disclosure: Held