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5G is investing another £800,000 into the company and obviously believes in the investment case.
The key issue is what amount of shares will it get for its investment
Unless management has not got an ace up its sleeve it will be at current SP levels which will be dilutive and will require 5G to issue a holding RNS
having over 3% plus .
I don't expect this to happen .
Imho
DYOR
Not that is will make any difference but to put it simply I think 5G owe it to us to be a little less opaque. If it’s a deliberate way of bending the rules to get what they want then fine but goddaym we must have some more good news and soon . Atb
There is no holding RNS from 5G because it hasn't been issued with the shares as yet so no dilution until they are.
That is the point of the Subscription Agreement and imho the reason why the shares will be issued at higher SP to avoid undue dilution
They have no insider knowledge but maybe 5G feel more confident about the company's prospects and has moved accordingly.
Blimey uhlf I was just about to copy and paste the same post!
A response over on a d v f n to my post in here at 12.49.
There’s some reasonable points
Greg the Grinch
Positive?
How about put out the good news then let the SP rise and then make 5G pay a truck load more cash for less dilution?
Or good news = warrants and no more dilution?
ENET control the fundraising - they did this and it is not positive.
There are positives and negatives in this raise but lets be balanced in our analysis.
I'll say it again I am not selling :o)
Med/long term still a great play.
It seems to me that 5G are party to what amounts to insider informatin but with none of the restrictions? And regardless of any rules regarding their domicility and fund status, a holding RNS would not be an unreasonable request?
Yes agreed.
Imagine trying to sell 250,000 in this market.
Might get them away at 25p.
The corollary of this situation is that if big news hits the SP could double in an instant.
Yes, unloved right now , £1800 or so sale enough to knock £500k off market cap. But that’s the way with these small cap illiquid shares.
It will change, I’m sure of that.
Yep hopefully this is just a short term weakness. They've moved it down but still no quote to sell even 1k shares, MMs don't want them
Thanks dallo. Yes, the clock is also ticking on the remaining 30p warrants, just over 4 months remaining on those.
Of course, the time limit could always get extended. But I’m sure they would like to bring the balance in and raise a very handy c £650k in doing so. I’m encouraged that a significant but minority chunk have already exercised.
Be good to get this done in the next few months.
Uhlf
It had to be structured in management's favour to allow Levi to build market and product visibility and demonstrate growing revenues without giving the whole company away for peanuts.
For example if 5G chucked the full £3.2m in one tranche last September they would have ended up with c45% of the shares when Market Cap was under £7m.
So management and staff have participated in the Placing and do not want to see their shareholdings diluted unduly and hence have a vested interest in a much higher SP in the very near term.
The clock is ticking.
Thanks for your take and comments dallo.
You raise some very interesting points, the one re management is still exercising control over the Subscription Agreement is one I've not fully considered before and , if true, that is important. As you quite rightly say, without seeing the full agreement it is difficult to comment with any accuracy.
ATB
Another very important issue in the event of 5G receiving it's full amount of shares at the current SP is the massive overhang of stock held by a 22% plus shareholder ( my calculations of potential % holding by 5G ignore any amounts still held from the original c820k share allocation)
So if management is smart it will avoid such a situation arising and the only way to do this is to drive the SP much higher through significant deal/ revenue newsflow.
Everyone here knows this and so does Ethernity management imho.
DYOR
Uhlf
This type of Subscription Agreement involving a prepayment option and future share drawdowns at an unknown share price is difficult to analyse without seeing the full agreement.
Clearly Ethernity management as major shareholders want to reduce dilution to the very minimum. For example if 5G call the 3 amounts
under the 2nd ,3rd and 4th tranches of £438k each and balance of £107k from 1st tranche then at the current SP of 33p ,5G would be issued with c 4.3 million shares or c 10% of the then enlarged share capital.
This level of dilution is obviously unacceptable to
Levi and the team and hence the suspicion is that they are deferring the issue of shares to 5G until the SP is considerably higher.
If the final commitment of £1.5m is called from 5G and the SP has not budged then a further 5 million shares could be issued to 5G bringing it's total POTENTIAL shareholding to over 22%.
That is why I am more assured now that the SP will be much higher when 5G is issued it's shares
and satisfied that management is still exercising control over the Subscription Agreement .
Now it is up to Levi and the team to show what they are made of.
I am confident they will succeed.
IMHO
DYOR
This agreement with 5G won’t have been agreed in a day.
It shouldn’t have taken too long. But would it make sense for all parties to conclude this agreement before ‘serious ‘ news flow starts to hit? I think it does as it affords 5G maximum flexibility, even though a fair amount of that is already built into the agreement. And it means ENET can comfortably plan ahead knowing the funds are or will be available.
I think it is also fair to say 5G will be privy to far more info than us mere mortals, having tied up in excess of £800k in short order and probably more like over £1m. If they wish to release some of that they need to be assured that the future looks good. They can only sell into the market when there is liquidity. That means good news or bad news. Bad news and they take a bath, discount or no discount.
They must think good news is on the way in the short to medium term would be my guess and it’s obvious they are more than satisfied with progress to date.
So this is an endorsement by someone who’s looked very closely under the bonnet and likes what they see. No doubt there is an on going dialogue in any case.
In closing, my view is this is a positive move and it makes sense to do this before other important business news hits the decks.
All imo.
Be interested in dallo’s take on this development
GLA
Tide is out and now you can see the shopping trollies and old bikes rotting in the sand. Not my view but the market condition. Soon a new tide arrives to lift the price.
L2 weakened, just one MM left on 33p.
All a bit of background noise on zilcho volume so nothing to see here really.
33.39 to buy.
Nothing from my contacts for a couple of weeks now. I am in Israel. I am avoiding covid restrictions but so far I have achieved 3 mandatory quarantines in 3 Countries after about 4500NM under diesel. I will sit tight here now. Summer is coming and I have 7 days more before I can step ashore. Until then I will relax a bit.
Patience and faith in company needed in strong measures . All I can say is TL if you are actually in Israel keep on supplying the Tea lady with high quality vape refills and keep posting the updates. Atb everyone
As ever if you are an ENET shareholder patience is the key requirement.
Well it's certainly frozen the price.. you can't sell any and there don't seem to be buyers.
Thanks Tracylied.. I do appreciate your informative posts.. not convinced to average down until the teens.. but haven't sold what I have in case I'm wrong....
Given the trigger price and the agreement to release early I suspect disclosure and market updates were discussed. The share price needs to be stable through this process.
I'm definitely seeing this as a positive particularly in light of Dec 2nd RNS and last months announcement about DU developments with server manufacturers, and it isn't as though this is a bolt out of the blue - this was all detailed in the funding RNS last year. IMO the company drawing these funds at this time certainly suggests very accelerated development and progress towards monetisation. As always, time will tell. GLA LTH.
Cambridge "contract" what contract. You don't understand how this works. Ethernity retail not contract. There will be sales but no contracts.
OpenRAN is about selecting the best products this is a ever changing environment. The sales will fliw through OEMs and integrators once those OEMs and integrators win contracts.
Even the DU with server vendors will be subject to the vendors winning contracts. This is OpenRAN you have to understand the fundamentals or just look silly. You achieved one thing today Cambridge.