Well theres many variables to this equation ,
First of all you need to find out whos selling , is it informed T20 ? or maybe a participant from the CR ? , or exhausted retail ?
Its more than likely someone who came in for the raise as the timing and volume kinda adds up .
But the question is why ? if they came in for x amount of shares at 3.5 why would they flog it down to 2 cents and end up down roughly 40 % on their initial investment , well they would be down less as they have sold all the way down and not just at 2 cents , so you could say 20 % loss give or take .
I have witnessed countless cap raises on the ASX and the general rule of thumb is that the funds that take up the raise will offload their stock as soon as they get it , but its usually bit by bit as to not sink the share price which would result them in incurring a loss .
Look at HIO as an example , recently raised cash by issuing 62 million new shares to Regal at a 27% discount, the day the shares were issued on the 28th 25 million went through in 1 day , Regal will probably end up flipping the lot bit by bit for a small profit and move on , thats the nature of the business .
Our situation is a bit different , someone wants out and they dont seem too bothered at what price , maybe its deliberate and they are scooping up shares on the cheap via another account which is illegal , or maybe they are happy to take the 20% loss , keep the options and move on to the next one ? , if thats the case then let them sell now and not into good news or price sensitive announcements in the near future .
I will request another T20 and compare with older lists to see if i can see whos selling , if i was a betting man id say its from one of the nominee accounts as one of them have sold a few million lately . And going by the manner in which they are selling , its not your average retail punter , algos selling off screen , cp trades and so on , i seen it sell down this avo , an algo sold it down and loaded up the offer straight away ,( i have it recorded ) this is a big firm/ broker selling , for themselves or for a client , this is not retail selling .
Also remember New Nevada Resources also sold out completely a few months back , they had over 10 million shares .
Ill get back to you when i get an updated T20 .
MGU Price at posting:
2.0¢ Sentiment: Hold Disclosure: Held
