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This is the UK division of the $7bn parent

Roger, nope. Nothing the scale you mention.

Stateside they are a regular occurrence but not yet on LSE.

The speculation is on Allwyn UK division reversing into ITS.

It makes sense that a huge capital injection would be required if new lottery operator was to roll out new hardware in Feb 2024 when they officially take control of UK national lottery.

An IPO would take too long as they would need to be placing orders now for new hardware and software to be designed and manufactured in 6 months.

An RTO would raise capital in a month or two rather than 6+ months in the case of IPO.

All this has to be in the bag by 27th Sept so it has been in the pipeline for months while they were keeping an eye out for a shell.

Big day today, there could be pressure for the MMs

Someone really is enjoying themselves with the trade quantities!!!

InvestorACE - just checked twitter, last tweet on ITS ((ITSARM) was 29th July

InvestorACE - Which groups, I would like to see for myself.

El_f.

It certainly does shift when bought. There is little free float and many holders not selling.

Trader buying back in again on another board and where he goes, so do his followers!!!

Nm

Ignore the £6m post listing comment. Only valid if ITS was newly listing as a shell.

MrM

I’ve been involved in plenty of shells on the run up to RTO and you’re right, once the company revising in has officially signed up to the RTO the shares are suspended.

But

On the run up to it being made official, you first get the RNS stating the board are evaluating a number of options. (Which we had last week)

You may then get further RNSs stating the industry they have narrowed it down to or other teasers.

This can sometimes create the volume brokers can sell into for the fund raise which is inevitable in most cases.

Don’t forget, ITS has to raise £6m cash post listing.

There's many reason as has been pointed out, I haven't looked into ITS RTO for this but in some cases retained losses can be transferred to the new company and have a massive saving on future tax liabilities. ITS lost approx £5m in final year. It could be more when final accounts are in but 25% corporation tax on the first £5m profits for new firm would not be payable.

Its not at simple as this in all cases but in some its a very big incentive to RTO instead of IPO.

In ITS case, this £5m loss is negligible if reversing something of the size of Allwyn but to a smaller company, this is a valuable incentive.

Nm

That’s the point I’m trying to make. It’s impossible to forward sell at this share price and volume.

If, and I said if they are going to use the shell to raise funds they need to encourage volume and at the current sp and mcap it would need one hell of an RNS to do that.

It’s that RNS some holders wait for. Rather than be one of the buyers into a spike engineered for a fundraise, be a seller.

This is just one scenario worth buying or holding ITS for.

I’ll say it again, you paint such a drab picture of buying and holding a shell, blank cheque, SPAC, why is there such a massive following of investors and traders buying micro cap shells in the hope of turning a profit?

Hi MrM, they will call it which ever way raises the funds the quickest and easiest way. I've seen both.

If the company being reversed in would struggle to raise funds off their own merit, they will use news and a high demand while the shell is still trading, forward selling into the rise to raise funds through the shell. Judging on how desperate MMs were for stock days after the initial rise, this hasn't happened yet otherwise new shares would already be on the printing press.

Also, in many cases, new shares can't be printed without shareholder approval and the only way you will get that is if there's something in it for them. I suspect that may be the case here or brokers were surprised by demand last week and not in a position to forward sell new stock.

Either way, profit on the RNS and demand for stock or if this doesn't happen, with such a tiny mcap, the value per share of the new company could be huge.

MrM, totally understand and agree but you're forgetting how fund raise normally works.

You mention fund raise at a premium. You can't raise fund against a £1.2m mcap company like ITS without a market for the holders of the newly printed stock to sell them into. If the company had an mcap of £10m-£20m, you can print shares at a discount and sell at the current price or lower. The diluted company mcap has somewhere to go.

ITS Mcap at £1.2m has no where to go for new stock to be sold into without news.

Its the news we are waiting to drop to create the spike for the MM's to earn their living forward selling the fund raise stock.

👍 I’ll check out my HL account next time.

Roger, who’s your broker?

Most of yesterday (and Friday) I could sell up to 200,000 and for shorter spells over 500,000 without going NT. In the morning they would take 1,000,000 without going NT but everyone was experiencing not being able to buy even 1,000

I gave up at 2.6p trying to buy any, I had limit orders in place for over an hour set at offer and didn’t get filled despite L2 looking like there were plenty at 2.6 available.

You must have a better broker?

Your right Louis, actual buy/sell price is 2.968/2.81 The last 3 trades are all buys despite showing red.

Look at that spread!!!!!

MMs doing everything they can to discourage buyers, especially day traders.

A day trader won't touch it when with a 0.5p spread on a 3.2p share.