Hey Ladies & Gents,
As you're all aware if you follow this stock, management has undertaken a capital raising with a now upsized institutional placement of $100m, with a share purchase plan of a paltry $5m.
This raising is EXTREMELY dilutive to retail investors whom are the majority owners of the stock. I personally emailed Oleg Vornik the CEO regarding this issue. He confirmed that no registry analysis had been performed prior to this allocation to ascertain the institutional or retail holding proportions, but did acknowledge that the stock was almost entirely held by retail investors.
Unsurpringly, as he has sold his entire holding, this dilution is something that he is completely unphased about, as it does not effect him - a potential case of insider trading as they'd have known more than a month out that they had intended to raise capital and that such a large issuance would likely depress the stock price.
As a further red flag, the company knew from the last equity raising that it had a strong level of retail support, with that SPP oversubscribed multiple times over. Unlike the last issuance, this one has a deliberately placed cap upon it to prevent retail investors being upsized to more than $15m, ensuring that dilution occurs and that institutional investors pilfer your money.
Another red flag was their quotation of a 5 day VWAP to position the discount as appropriate (18.9%) and reflective of the sort of normal discount required to raise capital for a company of this size. This VWAP is meaningless as they had made two prior market sensitive announcements during this 5 day period, a trading update and a confirmation of the NATO procurement framework being approved. Both of these notifications were deemed market sensitive by the company, and equally by the market which revalued the stock off the back of them.
A circa 28.9% discount on $100m of stock equates to north of $25m of retail investor money being pilfered by institutions in what is a shocking example of the worst way to raise capital.
I have lodged a complaint with ASIC requesting the transaction be investigated and suggest other shareholders do as well to build pressure and ensure this sort of activity does not occur again. You can do that following this link:
https://asic.gov.au/about-asic/cont...-to-asic/make-a-report-of-misconduct-to-asic/
I have expressed by disappointment in writing to the CEO Oleg Vornik (who actually reads emails from retail investors) - I'd also suggest you do this, to make our voices heard if you too are aggrieved with this activity. You can do that by writing to this email:
[email protected]
Finally, I have written an email to Stephen Jones MP - the minister for financial services whom oversees ASIC (
[email protected]) , CC'ing my local member, and Fiona Balzer from the Australian Shareholders Association who seconded and supported this action (
https://hotcopper.com.au/mailto<img src=">
(20min delay)