Exactly Eric, they can as there hasn't been a great lot of volume until late so if they wanted they can dictate play with their holding. They got the shares at 3p but if the sp stays at this level then we only get 750k from the £1million raising from Lanstead whereas if it went to 4p we would get the full million. Anything above 4p and we get more. Why would they want to pay us more if they can help it, especially in the current market? it's to easy for them.
In a bull market things would be different, a similar deal and they would be constantly paying over the initial price. Basically it's a win-win for them both ways.
This is taken from sharesmagazine, basically the same as what we have but in reverse. They will probably hedge there deal.
Financing providers like to give a positive spin on their services, saying they are supporting growth companies. They charge a fee to set up the SEDA – even if the miner does not actually draw down any cash. The financier typically agrees to buy shares in exchange for drip-feeding money. Ultimately what happens is the financier hedges the deal – through short selling the stock – to make money on top of the initial fee. More and more shares are issued as cash is required, which tends to send the share price ever downwards – hence the term ‘death spiral’.
Why a 4p ceiling though? Surely Lanstead can't manipulate the sp to suit. They don't own the majority of shares in issue. Having said that, there will be people who have bought into this and when the sp plummeted into the bowels of hell, just locked them away in a drawer for a few years, so they are static shares if you like. A bit like ours, the long-term duffers. Lol.
Oops, threw away the key. Lol.
Let's see if we get any news, or at least how the week pans out.
Yeah, nice to see the buying and interest. We should of risen based on the demand last 3 trading days. Perhaps to do with the open offer of shares yet to come at 3p? Or more likely, Lanstead. they wont want us to make more than we could (for now) from the recent placing. (4p) ceiling. They will want to pay as little as possible for their shares.
Is it possible a large short can suppress this? I dont know.
Yep, just looking in again now. It's been a while since we had this number of trades in a day, so unless it's something to do with the recent fundraising, there may be a leak somewhere or mms holding it down for an II to climb aboard, splitting the trades up.
Have to see if news tomorrow, but a kick in the guts for all concerned if the buys continue and the sp remains stagnant.
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