RE: a discount of 92.09 per cent?14 Dec 2022 08:38
Stockopedia comments......
Trackwise Designs (LON:TWD)
Horrible news today, of a massively discounted fundraise.
It’s doing a placing to raise £3.65m (before fees) at just 1p per share. The price last night was 12.65p, so the fundraise is a 92% discount.
The share count will rise from 37.5m in issue now, to 402m after this placing, an increase of 972%.
Then there’s likely additional dilution of 150m new shares if the open offer is fully taken up, so 552m shares in total.Existing shareholders can participate in an Open Offer, with 4 new shares (also priced at 1p) for each existing share. So that’s something, although it would still cause significant dilution even if shareholders do take up the open offer.
PLUS there’s more potential dilution from warrants being issued, although I wouldn’t worry about that, because the exercise price is 6p, which would be a delight to achieve a share price of 6p or above. Management express “deep regret”.
As we keep discussing here, you don’t want to be holding anything that needs to raise fresh cash. Balance sheet strength is absolutely key right now, as it's so tough to raise fresh cash. This announcement is another reminder of the risk of being almost wiped out if the institutions don’t really want to support a fundraise. Be careful out there, conditions are really grim for small caps that run out of cash.