Another ‘reality’ is that the term sheet for the CR is actually shopped around by the broker several days prior to it being announced to the ASX. The reason for this is that the CR is not announced until the amount/price sought is actually confirmed by the broker (to the company) as being able to be raised. This ‘shopping around’ is done under a loose form of confidentiality. No signed NDAs or anything.
The 2 day ASX trading halt for a CR is only the period in which the money is collected from people who have made a commitment. The actual raising is well in motion several days prior to the halt.
The convention is that placements are done at a discount to make it attractive for the new equity and as consequence force the share price down.
This becomes a self fulfilling prophecy sometimes because when the term sheet is shopped some insider trading can occur. Some existing holders get wind of the CR and choose to sell out in advance of the CR to avoid the price drop.
Different placements have different levels of insider affect.
You see this very regularly. The regulators have no time and interest to chase this sort of activity.
Thats my call on it.
It is certainly not a level playing field. Welcome to the ASX.
Gosouth
SYR Price at posting:
$2.46 Sentiment: None Disclosure: Not Held
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