RE: Brutal23 May 2020 18:48
That’s very unlikely as someone posted earlier that retail brokers got about a 25% allocation for what they asked for, primary bid £2m odd, that’s the number for the market to churn through, yes still an awfully lot of shares. Lots of those applying via Primary Bid or retail brokers are going to be existing TRX holders trying to bring their average price down.
IP Group have put in another £2m to maintain their 13% holding, I’m guessing you’ll see a fair few other institutions pop up on the register post the GM. It’s been fairly evident for months that TRX needs to raise a large amount of additional capital and unfortunately it’s come at a price. At least this funding now allows the company to increase capacity so that they can move to breakeven and eventually into profitability. Don’t forget the £14.6m investment gives a potential sales uplift of $36m as phase 1 & 2 get built out.
Perhaps the discount to the last week of trading is high but remember these shares were changing hands for 0.4p odd mid last month. At least now TRX has the potential to get sales up to $50m a year. If they can turn a £5m profit on those numbers and just for ease of numbers put it on a 10 times PE then we have a £50m company. Throw in a 3 times annual turnover figure and you have a much higher number. Plus at least now the Link/Woodford 20% stake will be diluted down assuming they have not invested in this round to a much more manageable 3-4%.
Yes some short term pain for existing shareholders but I’m now more hopeful if you pardon the pun given the current environment that TRX can now off life support and learn to stand on its own two feet.
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