As Guild has pointed out it was only 800,000 or so shares. But even so, its potentailly enough to affect the share price (since the SP is a reflection of the ratio of buyers to sellers and suddently in a low volume stock there are more sellers) and once that changes then the chart drops and traders who read charts change their minds and it could cause a knock-on effect. My concern was that contractors want cash not shares, so their first inclination will always be to sell as soon as possible. They can't run a business on shares - as you've said Neil - they need cash flow. Ask any small business operator. And if they lose %5 to %10 on the deal then so be it. Its better than losing cash flow and becoming insolvent. I don't think it was such a great idea myself. But did they have any alternative?
By the way, I don't believe any of this would have gone to the placement underwriters (someone mentioned it earlier?), as, correct me if I'm wrong, their fee comes out as a percentage of the placement funds.
Sorry to go on about this. I have decided to treat this as a buying opportunity, even though my bank balance is extremely finite and I'm not going anywhere near a margin loan until I figure this caper out with my own money! Should have waited before piling in between 24c and 26c. Still, well worth that and more.
CNM
carnegie corporation limited
