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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.
I've had a small buy order with limit price of offer (2.6p) and I can't get it to fill.
Approx 116k shares sold between 12:06 & 12:12 and they still won't fill my order.
In fact even though the only trades for 15 mins were 3 sells, MMs raised the bid. And ignored the offer they won't allow us to buy at!!!!
I don't want to put an order in with no limit, I dread to think what they would fill it at.
No idea.
I still think MMs are short of stock but know many traders and PIs are watching ITS and any show of another run and they will all jump on it leaving MMs with nowhere to go.
They are walking bid down hoping to hit stop losses and for bored holders to sell.
Yet they will take £30k worth without NT but won't sell you £260 worth!!!
If its not MMs short from last weeks epic rise then they know something is about to land.
Just look at those last few trades, only 310 & 502 & 117 shares traded. MMs just won't sell you any without a fight.
Can't buy more than 10,000 without going NT
That's the first mention I've seen of short positions in ITS
If there are, it won't be traders, it could be the MMs from last weeks rise they had trouble filling.
It would explain why I am always able to sell between 100k & 600k shares at bid or over without going NT
It may be interesting later today because most MMs have month end targets to hit.
This may involve buying back up ITS shares hence the willingness to take huge quantities of stock well many multiples of NMS
Nm
Check out AURC on NASDAQ for some blank cheque company action!!!
This isn’t a ramp because i haven’t bought any but this company is now worth $200m waiting for a reverse takeover to go through following announcement on 26th July.
ART123, your really trying to paint the grimmest of pictures.
We buy into SPAC and shells to make a profit, its a thing.
I'm sure if you dig around, you'll always find some which didn't work out. I personally hold on to two. (HWC & INFT) but the money I've made on others, more than make it worthwhile.
These directors are no stranger to the AIM and have a pedigree worthy of the speculation.
If MARAX come off offer, 3.7 to buy from 3.3!!!
Still no one wants take the lead.