Please only reply if you know the answer.16 Nov 2022 11:00
Morning All.
On the 11th of November we were informed that we had a bill to pay to various companies for services rendered in the sum of around £1 million. Normal standard working practice.
We were also told that the bill would be paid by issuing new shares at a price of 7.65. In my experience, when this has happened in the past, over the time between the announcement and the date when the shares are released to market, usually 7 to 10 days, the price at the time gradually makes its way to the exercise price.
The 3 days prior to the announcement had seen a small rally to 8.5, this reversed immediately and as expected we find ourself at 7.6.
So my question is instead of paying the bills using cash at hand, not having to report this to the market, and it just appears on the next accounts as a legitimate smallish business expense do we raise cash which results in damage to the market cap of around £36 million.
From where I sit it looks like we have spent £36 million paying a £1 million bill.
I also know that this cannot be correct and I must be wrong so I am hoping that someone can explain this to me to enable me to understand better.
Thank You.