As always there is risk in future sp movement. The difference this time is that it's possible to arbitrage the price by selling now and buying in at the issue price. What can't be controlled is the quantum, subject to scaleback.
Three factors mitigating against scaleback are the $5k limit; too high for some investors, the earlier public issue disqualifying some holders and the short time span available to participate.
One way to possibly limit funds outlaid is to pay by cheque. Some companies choose to hold cheques until the scaleback has been determined. However I would strongly recommend against flying a kite. The company is entitled to bank all the cheques as soon as they arrive and hold the funds for interest.
Personally I will be paying by direct deposit. My cost of funds are currently 9%pa and I expect a 6 week turnaround for any scaleback refund. This will cost me 1.04%. I need to balance this against the 19% profit I make by selling shares today and buying back at 10.5c. The scaleback needs to be massive before I start losing any of my hard earned.
The downside in this story is the possibility that I will sell more shares today than I buy via the public offer. If the sp then rises it will cost me more to get back to my original position. Will I be complaining if MRX jumps to 18c? Not likely.
MRX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
