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Thanks Davey.
gs, Christian mentioned possible M & A activity, disposal of non-core assets and a possible acquisition of a large molecule asset or player at the JPM meeting. Also noted on slide 33 of the latest Corporate Presentation. I continue to Buy ;o-)
Hi Davey. Have I missed something.? M&A? Left field :-s what the checks going on.?
Agreed Jatw but some form of M & A, probably A is on the cards, maybe a large molecule asset. CP disposals have also been mooted. I am also not sure whatever happened to the 2nd tranche of property/land compensation.
The prospectus listed what the proceeds would be used for..nothing referenced M&A.
I hope any M&A will have a large element of locked up equity or is a relatively small bolt on $20-50m. Beyond this level it should be JV as this company does not have funding to p*** it up the wall paying hard cash for goodwill and maybes.
I suspect that the management might have agreed the price and quantity when the share price was closer to 400p, but by the time they came to execute the plan the share price had already shot up to 450p. So the market saw this as too big a discount and went into a panic sell. I would have sold it at 450p if I had the confident that I could buy it back at 400p. At the moment the bid price is around 375p but I am not buying as I am already way overweight on this stock. Best wishes to whoever is buying or selling....
Having had in excess of $300m in mid 2019 there must surely be another reason for raising more now. I can only assume the mooted M & A means more is needed in the short term.
The herd response for any traders is to sell....this issue was something of a surprise as CH has been talking down the need for a fund raise.....any recent investors with stop losses will have been triggered.....hence we have a huge market movement for a small event.
I don’t mourn their losses as I would rather have long term holders in this long term business.
Historically the company has operated with a 2-3 year fully funded balance sheet. They were expected to use their own cash reserves (not borrowing facilities) end 2021 so this raise will push that out to 2022 and with cash starting to flow from surufatinib next year It may be the last one for a while...
I still don't understand why a $110m placing wipes $500m off the mcap
two things:
1. Ridiculous response from the market for such a small issue
2. Management has been badly advised regarding these issues. Better to do one large one and then tel the market no more for 5 years. Also, discount too big - why did the feel need to price it so much lower than the price a few days before.
Whole thing shoddily handled, followed by market over-reaction. Annoying.
davey, hope you're happier this morning!
6 months of recovery wiped out in 24 hours
I will however be buying more tomorrow
Ouch!!
$110m raised but almost half a billion taken off the market cap. I don't quite see the market logic here.
Indeed turramurra and I only ever buy, never sell, so not an issue ;o-)
Only lost £75k if you sold out. You'd lost significantly more when the price recently dropped to less than £30K. Every cloud........provides you with a buying opportunity. I much prefer cloudless days as I have more than enough invested here.
If the Offering timetable plays out like the one in Oct 2017 we can expect an RNS announcement re: Underwriters taking the over-allotment tomorrow (hopefully) and the closure of the Offering on Monday.
If it also plays out like last time this could go up significantly in the following days and weeks.
already up 2% in NASDAQ pre-market this morning, over $1 premium to the issue price - a very Bullish sign!
Possibly the Last chance to get in under 400p
$25 price explains the big drop yesterday. My bet is this will recover up towards $30 in the next couple of weeks. There was a goo recovery within a week of the last offering.
Another buying opportunity I will not miss ;o-)
Company SPs often perform well after a share issue....particularly those that are for positive business reasons.
I said at the CKHH sale that the market would have another bite at the SP in a HK listing and this is no different.
The strong run of late shows the underlying opportunity......the Board is right to tuck away some cash now.....if they leave it 12 months they would be harder pressed and the discount would be deeper.
History will Show this to be a good buying opportunity
not all of my wealth is invested in Chi-Med, although quite a large proportion! I am very confident in the future and will be invested until 2028.
Today's 10% drop is typical, but 10% = $390m which makes no sense given the fact we are raising $110m so even though the market considers it dilutive, wiping out almost 4 x the placing is madness
I expect this will rocket up in the coming days
*cann = cannot. I really must get into the habit of re-reading stuff before posting!!
Davy - for the love of God, I know you love this stock, butit seems to me you have too much of your wealth tied up in a stock where the outcome cann be fully predicted by anyone, no matter how good they are. Why don't you diversify, and guartantee some better nights' of sleep.
I have no more than 1% of my total wealth in any one particular stock which certainly helps the old blood pressure!!
Sorry?