Proposed placing to raise approximately £4.55 million of up to 108,392,857new ordinary shares of 1 penny each ("Placing Shares") at a price of 4.2 pence per share (the "Placing Price") with new and existing shareholders
I did say at the beginning of the week. Why so low? This is going to smash 3p today.
I think we may well have been correct here as the price action now suggests a placing well below current levels. 6.5p is where funds were raised previously according the accounts so I don't think they would do a placing any lower than that but I find it hard to justify a placing above that level either. Possibly a little higher as that would always be the preference but I don't think it's possible in these market conditions.
I would say that things have changed now and rather than buy at 12p look to see if 12p is breached. If it falls below 12p then it will end up back to the 8p level. They will be needing working capital any day now going on the published accounts. I don't think they will be able to raise working capital at these prices having been under 6p a couple of months ago and also when we are very close to a global market crash which could come any day now.
Chris, no problem. My point was more that 12 looks like being breached already, which I originally treated with incredulity (and if I remember correctly I wasn't the only one). That's why I remembered your post. FYI, I haven't bought back in yet either, so I'm happy I followed your comments rather than mine.
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