Sp's often rise on a placing especially if it advances the company's immediate prospects. here's one from ROSE last june. they announced a placing of 433m shares at 1.5p raising £6.5m to fund a drilling programme. The dilution was in the order of 40%. guess what? the sp actually went up on the news. From 1.9p on the day of the placing 20 June, it went straight up to 2.5p within a week and shot up to 4.2p by 25 July. And remember ROSE havent produced a single drop of oil yet. We are generating $1m per month in oil sales and this dilution is less than 10%.
In hindsight the recent sells that have depressed the sp have probably been the subscriber. It is interesting that the big sells actually dried up today coinciding with the placing news. That suggests to me this stock was given to short term investors who offloaded for a quick profit. However todays rns states that the placing shares are intended for institutional investors. if they do end up with ii's i dont think we should expect the kind of dumps we have seen of late.
Yes, I know and that is a very positive outcome in my opinion. That's what I was saying?
Sadly, dilution is what it is and we will drop on open as that's just how the market works. Like pargaboy said, these shares are not going to traders so I'm not overly bothered and I'm here for the long term anyway.
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