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20% or 90%. Any discount is better than nothing which is where this could have easily went. You say you cannot see how the directors can justify a discount of 50%,80% or 90%? I cannot see how they can justify a discount of only 20% when a 100% of the business has ceased trading with no cash and only creditors to pay off.
mike444 When a company places shares there are two types of dilution. There is the dilution of your percentage stake. For example if there is 100 shares in issue and the company issues another 100 shares your stake has been reduced by 50% (provided you are excluded from partaking in the placing). There is the second dilution which is the price at which the new shares are placed. Normally In order to attract a new investor there is a discount value to the placing shares so the new investor can realise a profit immediately. I use the word normally because there are cases where the shares are in such demand or the directors are so confident in the company that the new shares are placed at the current market price or even higher. The recent placing by REM being such an example. In the case of the new shares in MDC/LEO it is impossible for the share price to be the same for on the30th April 2013 you had a company that was about to launch a nation beating gaming platform with the Tote already signed up now on the 23rd August 2013 you have company that has nothing except creditors and sacked directors. So how can the value of your stake be the same now as when it was when the shares were suspended. The only chance of the shares retaining their current value is if you get a bunch of speculators thinking LEO is the new REM and that is not going to happen because the shares are initially coming back at 100p. The speculators in REM are penny and sub-penny investors.. As I said before there is a reason why the consolidation is 1000 : 1 it is in anticipation of a 90 - 99% drop in the share price on relisting. If it drops 99% then you have the 1p share price for which all these worthless microcap oil and gas companies trade at and 1p is also the price at which new shares can be raised and attract REM type investors.
Any mug can tell you that if you are going to utilise a shell listing it is the oil and gas sector you go for. It is the one sector from which you can raise millions of pounds in equity on reports that cannot be verified by anybody else. Why do you think REM price shot up. They've reported the finding of a 100 trillion zillion tons of lithium. Who is in a position to deny this? Nobody. If they were in the pharmaceutical sector and reported that they'd found a cure for cancer they'd be torn to shreds. Of course its no coincidence that REM are in South America and LEO are heading there too. Its the place to be now for worthless AIM stocks.
This is the key passage from the entire document:- "For the avoidance of doubt, it is the Directors’ and the Proposed Directors’ intention to issue shares for cash as soon as practicable following the passing of the Resolutions. Any such issue may be materially dilutive to existing Shareholders." .."may be materially dilutive.." LOL!!! The directors had to consolidate 1000 : 1 = 100p because they are fully aware of the big drop when the stock opens. If the drop is 90% it allows them to issue new shares at 10p. What a complete farce. But when the alternative is nothing I suppose a 90% loss of shareholder value will just have to do. Speak later
As you quite rightly point out shareholders have no option but to vote in favour of all the resolutions or its zilch. However you can be rest assured all the necessary votes to pass all the resolutions have been secured from the nominated brokers like Barclays, Selftrade, Halifax TDW et al. Who in their right mind is going to vote NO. Personally speaking I shan't and don't need to bother.
In a hurry sorry. The share price used should have been 0.1p not 0.01p but on reflection it does not change the original dilution of 99%. Speak later.
Wrong share price used the dilution is 90%.
"but to me this is as good as I hoped for.. You have clearly misread and do not understand the circular. Read and learn:- 1. The shares before suspension were trading at 0.01p. 2. The shares are to be consolidated 1000: 1. 3. The new shares will trade at 100p = £1.00 4. The directors have stated : "For the avoidance of doubt, it is the Directors’ and the Proposed Directors’ intention to issue shares for cash as soon as practicable following the passing of the Resolutions. Any such issue may be materially dilutive to existing Shareholders." 5. The directors will seek authority to grant up to 100.000.000 new shares at 100p per share. That is equivalent to £100m of equity. 6 The company is still capitalised at only £1.2m immediately after consolidation. 7. The directors are seeking authority to dilute by 99% effectively wiping out existing shareholders. 8. When trading starts at 08:00 17th September 2013 it might be wise to head for the exit if you have the time for the directors could announce a dilutive placing at 07:00 that very same morning.
"It's not what I wanted and it won't be the multi-bagger it should have been but you will hold same % stake what you have now with MDC but in another name." This is incorrect. If fresh cash is being invested into MDC/Leopard Oil your percentage stake will decline accordingly. All things being normal if new investors pump £1.2m into MDC then your percentage stake will decline to 50% because MDC already has a market cap of £1.2m. What is important is the value of your holding not your percentage stake. If the new company has a market cap of £2.4 million after they pumped in £1.2m then you have lost no money despite a dilution of 50%. However the Friday RNS indicates the current MDC is worthless. This is why its important the shares do not start trading before the new set up. Clearly the new investors and directors are only buying MDC for its listing not its businesses. Any value attributed to the old MDC shares should only reflect the cheap value to the new investors of obtaining a listed shell. We have to wait and see what's in the circular but common sense would suggest that current MDC shareholders will end up with virtually nothing as the company itself is worthless and that's why the business has had to stop trading.
...Those who do not wish to be part of the new company or have moral and ethical objections to being invested in natural resource companies should be given the option to leave.
The company would have already paid for and gathered the necessary votes from the nominee brokers for the vote to be carried. So there is no question of share holders voting this plan out. Interesting point about the suspension remaining in place until the new company is set up. However knowing the markets I would suspect the MM and the new strategic investors would want the share price plummeting before they inject any money into this shell. This would give them the opportunity to pick up cheap shares so increasing their holding after the restructure and dilution. But a continuation of the suspension I must admit is not an idea that had crossed my mine. But it is possible.
Its not there and I doubt anything has been sent to shareholders in the post either. The RNS has to come out first so all shareholders are informed at the same time before circulars are sent to individual shareholders. The RNS came out at 17:42 so unless the circulars were posted Friday evening I very much doubt they have been sent out either. More lies I'm afraid.
...and that the company should be announcing these events on a Friday evening so ruining everybody's Bank Holiday weekend is below contempt.
People continue to go on about the small market cap. The market cap is irrelevant and I will show you why. If for argument sake somebody injects £100m in exchange for equity into MDC the market cap will rise to £101.2m but your stake will still remain at £1.2m because your holding would have been diluted by about 99%. But as I said in my previous post the real trouble will not come from the strategic investment but when the results are published. When the results are published the suspension will be lifted and the share price will plummet. So what was £1.2m will become about £200k. It is only after the plummeting will the resolutions be put to the shareholders. All the warning signs were there when TWL announced he was to become the new CEO. PJ has done what all AIM directors do...Look after NO1.
shawshankuk I'm afraid the others are a little more optimistic than they should be. For all intense purposes everything has been lost here. Another out and out AIM thieving deception. 1. Firstly all the businesses have ceased. There is no mention of anything being sold yet assuming anything can be sold. If Intabet and associated intellectually property is sold the monies will be used to settle the Purple Lounge legacy and of course the directors severance pay. 2. There is to be a capital reorganisation and the allotment of new shares. This will most certainly result in a dilution of no less than 80%. 3. To add insult to injury the results are to be published before the General Meeting on 16/09/13. The publication of the results will most certainly lead to the lifting of the suspension. Given today's update what do you think is going to happen to the share price when the suspension is lifting. You can expect an immediate plunge of about 80%. If you retain 5% or more of your original holding consider yourself extremely lucky.
The strike of request would have certainly come from CH. The objection would have certainly come from the company as per the last RNS.
That is old news. Way outdated.
Goal Millions is already up and running. The start of the Premiership makes no difference for as I said before I believe the Intabet platform is up and running but under a different brand name. Its just a question of wait and see.
Normally when a company is rescued it results in a total wipe out of share holders. From the last RNS it does sound as if others genuinely want to work with the Intabet platform. So I am hopeful. But I would not rule out the next RNS stating "despite the best efforts of the directors.." The End
It does seem to me that MDC will not be returning to the market in its previous form. Intabet may already be up and running but under the brand name of a different company. PJ said the finals and the interims will be published together. The start of the football season is immaterial now because MDC will not be trading as before. It is just a question of waiting to see what the transformation is. If the finals to September 2012 are not out by 30/09/13 the listing will be cancelled. AIM rules.