Operational Update and Placing3 Jul 2018 08:13
Good morning. I wanted to share my views after the RNS today.
Placing
I think the price is a very lazy from Novum and I was made aware of it yesterday, however under the regulations that prevented me buying, selling or providing that information to anyone. I think that it should have been done at no more than a 10% discount. I was invited to take part but due to other commitments (other shares I have been buying and business and family costs) I could only put a small amount of cash so only got a token amount.
I also tried to contact David Fraser to suggest that he pulls it and uses a different broker as I believe that the money could be raised at a higher price; I could not get hold of him and suspect he did not want to discuss it!
That said if the money has all come from quality institutional investors rather than smaller investors or those taking part only to flip the shares over the next few weeks it's actually good as it's more stock in sticky hands and the talk about placing which always hangs over a share should go away for a while. A TR1 (or lack of one) over the next few days will tell us if it has gone to a few sticky hands or many less sticky hands.
It's a 10% dilution so for me personally, subject to the price reaction today, I will probably see a £200,000 drop in the value of my shares which is not ideal but I am here for the long term and if the cash is used well within a few months it won't really matter. I was not expecting it though until the price was well above 2 or 3 pence.
I sold a small number of shares late last week for some business and family costs and as is always the way you wish you had sold more but I was not expecting the placing to be done yet and also the discount to be ridiculously large.
Drilling
I have only just read the details about ST as with a placing they don't really tell you a great deal. I was expecting this RNS to be that they have M2 assays and a revised JORC and I am very pleased with what I have read in the RNS today. Without the placing news this share would be rocketing today! With the placing I hope to see a gain but maybe not. ST could be so big for this share and today's news is a great clue of what should come.
Summary
Disappointed with the placing price but if it has gone to a good home I can live with that. Yes the price should have been higher and without the placing and just this news we would be looking at a mega gain today but at least David Fraser has done what most other AIM companies don't do and announced the good news with the placing. Most companies would announce the good news to drive up the price then announce the placing! Let's see what happens today.
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