The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I see a bit of questioning with regard to the sp and fund raise etc. In my limited experience, it is rare for the sp to rise too much after a fund raise, especially not before the new shares are admitted to the market. I put a small hint to this with the nel comparison saying the sp stagnated for a period.
To say it's a punt for ABB is a bit unfair. They have also dedicated time and man power. Part of the appeal of the AFC model is low cost. Look at some of the numbers from other hydrogen companies and the size of their fund raises, huge in comparison.
The presentation on 5th May may also answer some questions, and possibly attract more money. I'd imagine the price paid in this latest fund raise may soon seem to be a bargain, as often happens.
Eddietheo, I would agree if the cash was earmarked for cashflow in the coming year but this placing is very different, especially with £30+ million already in the bank to cover years of normal cashflow, and you could easily argue that the money can earn interest pending a large revenue-generating project coming along. The mind boggles what would happen if the company needs £65 million to fulfil orders!
FCI you are right in what you say but generally “cash in bank” is discounted by the market as its unknown as to when that has been spent... could be on day 1!!!!
People seem to be forgetting that the money is in the bank so most of the dilution is already offset by the money in the bank, at least until it is spent. The only real dilution is the reduction of future gains (or losses) as there are now more shares to divide up these gains (or losses) i.e. doubling the MCap will now require more good news to be priced in than before the placing.
However, add in the good news that came with the placing and I think that the effects are minimal, with the market seemingly taking this view as well.
Spot on Scarpa50, lots of upside from 64.50p.
10% dilution is only 7p at current levels so insignificant in the bigger scheme of things especially if we get some news of contracts. These extra shares will be easily mopped up into the soon to be rising share price!
Tariq
Institutions were happy to buy at 64.5p so don’t worry too much. They want to make money and clearly see value at that price.
Actually just to add on Bumble is entirely correct too, this dilution could already be priced and we could see no real change.
Tariq your existing shares will be diluted, no you wont be given any more shares, if anything what you do hold /should/ lower in value closer to the offer price (64.5p) however since the placement had a good reason (expansion and partnerships) and wasnt just a way of generating a CEO Bonus, i wouldn't be entirely surprised to see ths share price hold value.
Typically however when a company puts out an offering, share price slips in line with the offering, i.e. a 10% dilution will likely see around a 10% decrease in share price.
Can someone explain the impact of new shares being released will have on us shareholders? Do we all get more shares or what happens? I am abit confused on the specifics and the impacts it will have! It would be great if someone could help my understanding.
It is ironic that AFC doesn't always benefit from the sector rises like yesterday but then immediately drops back when there is a slight sector fall like today. Whilst this certainly isn't the first time that this has happened, I still feel that this is related to the placing this time and that the dust needs to settle once the shares are on the market before the next leg up can happen. No doubt, many people will be assuming that the SP will drop back as soon as the new shares are on the market and, whether or not this happens, it should be able to bounce back up pretty quickly.
On the positive front, this disconnect between AFC and the sector offers hope that the company will be able to outperform the market and move independently if the good news continues to flow and I wouldn't be surprised if a snippet of good news comes out alongside or around the time of the shares being issued in order to emphasise this point. Then there is the capital markets event to look forward to...
Wouldn’t be surprised if news has been held back until the seller has cleared. If they sell at 70 they’ll only be quicker to offload at 75 to 80. At some point every company likes to see their SP increase.
As they have announced a ‘date range’ for admission I assume they will announce to market but maybe not?
Most companies though give you an exact date for admission of shares when they announce completion of a fund raise so don’t then follow up with an RNS on admission day.
Would be good to know
Staggers we don't know, just because we haven' had the RNS yet doesn't mean they are not already released into the market
The shares have not been admitted to market yet so they can’t sell shares they don’t hold.
It’s actually holding pretty well at these levels now ready for next push up with news
Well DW it could be II's that took part in the placing offloading 64.5p shares at 70p ?
Let’s hope it all goes according to plan. I’ve bought more this week and now it’s going to hurt a bit if things don’t pan out. My decision, my risk (calculated) and not how I normally do things but I really like the potential.
In my view, the positive with sales is when they do come, I imagine them being significant. If we only take ABB AFC EV project as an example, I don't see ABB putting this time in to creating the product without confidence of a decent profit. They must have customers lined up. The fast return and investment from ABB speaks volumes in my opinion.
Another week closer to:
The CME, Acciona and hopefully some news about ABB orders. There are bound to be other things in the pipeline too. The SP is looking pretty solid and even if the placing has an effect, which I doubt, it’ll bounce back quickly. AB is sounding bullish and it’s all looking rosy.
That's all that matters, sales! Please please please....sell (say)something, anything! As the great song goes by james "give me a sign" that's the bottom line! It's coming I reckon???