Myles McNulty4 Jun 2020 10:17
AVCT
@avacta
placing at 120p to raise £45m.
This has been one of the worst episodes of insider dealing I have ever witnessed on the LSE. I imagine that mgmt. is sick of it, and that a transfer to (or, at the minimum, a dual listing on) NASDAQ will be expedited.
An FCA investigation could also be a possibility, if it receives enough complainants from retail investors. There is partial fault with #AVCT's mgmt. (but unrelated to the above insider dealing) in having assured investors that it had sufficient cash until "early 2022". 2/7
It would have been preferable to have raised the £10m necessary for the Diagnostics division, and then funded the Therapeutics div. out of cash flows from #COVID19 test sales. But I suppose the Therapeutics div. IS the core long-term value driver for #AVCT, and so securing.. 3/7
...such a huge amount of funding for it completely removes any reliance on the success of the #COVID19 tests (which is of course just a (albeit, phenomenal!) bonus to the #AVCT core investment case). This raise will fully fund at least 3 more Phase I trials, BESIDES pro-dox. 4/7
It's also important to bear in mind that a £45m cash injection is a MASSIVE endorsement for a Co whose mkt cap touched £25m only 10 weeks ago. The vast majority of this has gone to institutions I hear, including a mega amount to US investors. Bodes well for that... 5/7
...aforementioned NASDAQ listing. Placing price and equity dilution are a bitter pill to swallow - £1bn mkt cap will now come in at ~400p, as opposed to ~480p. BUT - my belief is that this cash will be used to generate even greater value than previously #AVCT could have...6/7
...and in a faster time period. We certainly won't be investing another £450k to retain our 1% stake(!), but are adding to the #AVCT holding today. I expect a huge amount of news-flow over the coming weeks, and for the SP to be back up above 200p soon. 7/7
https://twitter.com/MylesMcNulty/status/1268449831674150917
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