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We need 3 billion, not just 500m. So where are the other 2.5 b coming from?
"So, you think a new investor is going to pay above market price for equity?
Who are you kidding?"
The 400 mill for 50% was more of an example. The point was that if the partner could borrow at a cheap rate to complete that would provide a boost against the dilution.
They couldn't buy 50% on the market without the price being significantly higher as well so they may pay above the current market rate.
Thanks for sharing the article Chitting. I have been buying steadily over the last two days and will continue to do so when funds are available from other sells. Just dumped a load of PANR shares and bought more SXX. My feeling is it's a game being played to shake the small investors in to selling. This mine will get built at some point in the future and I don't feel the need to sell any SXX shares at the moment. You take your chances.
Yes the market is going to love getting diluted to high heavens.
Not all the time... if news is good price do RISE... Yes usually price drops to placing PRICE... all depends what company and what are the placings for and if MARKET likes it it could RISE...
500m would not scratch the surface of what is required. Finance would not be sorted. Placings never at a premium, and sp always fall below placing price.
I'm Considering avg down to the 10s, avg is 15 atm.... I feel with average of 15 I won't see green for years
Even we have Dilution yes it will be BIG BOOST for SXX as finance sorted... even this goes to 3 p for placing but more likely it will happen around 5p ... as share price would climb around 6-7 pence... so placing at 5 p ... finance sorted big boost and share price will be back around 9-10 pence
"OK.....
lets say company equity worth 100m.
Company requires new cash for investment, and can't borrow it.
Lets say they require 100m for investment.
Simply put that would equate to 50% dilution for holders
i.e. you own 50% less of the company."
In the case for SXX if we get a strategic partner putting in say 400 mill for 50% of company there will be a huge hit on dilution but we would have the 400 mill to further de-risk the project and more importantly if they can borrow the rest relatively cheaply it would give a boost to the sp.
on the subject of dilution,what does this achieve?i know that this had recentley happend with the shares?I am not being rude or anything as i am new to trading but i would just like to understand the situation a little more.
If we are waiting that long Chilting.Me and you on the mixer,And chesh on old blue.
As for further dilution - that was written into the SP long ago.
We don't have to rush into a decision on this occasion - there is still money left in the bank - my decision to hold and wait for developments stands.
This is a very good and interesting overview from Shares magazine including their view of what we should do now.
They recommended SM as a buy back in August - now they have SM as a sell. Personally I an holding.
https://www.sharesmagazine.co.uk/article/sirius-minerals-shareholders-need-to-make-a-big-decision