1. The rights issue sends the message "liquidity crisis looming", SP low and rights issue fails, market spooked and SP collapses followed by company.
2. shareholders recognise value and take up issue even though SP around 8c. Note that it really doesn't matter with a proportional issue what the price is at. As long as you take it up there is no dilution (your stake is still the same) and the company is worth more (more cash on hand = greater security). Credit market and stock market improves in 6 months time and stock goes to 50c+
I think 6c will be tested and am concerned rights issue will fail unless they have great news to bring to the market soon.
If I had money to spare I'd be sitting on the buy button for any absolute bargains.
AXI Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
