A few thoughts14 May 2021 15:36
1) Most of the money in the fundraise is strategic institutional money. So when the new shares settle in two weeks, they won't be selling then, or in the short term.
2) Many of these institutional buyers owned shares previously, but could not trade during discussions around the fundraise due to having "inside information" about it - hence there were potentially fewer sellers, which could partly explain the price spike in recent weeks.
3) From the time of the announcement, these institutional buyers could sell their existing shares - hence if they wanted to make short term profits (and not be in this for the long term), they could have sold their old positions this week, knowing they're about to get even more shares at 22p (and at 28.5p). It's therefore very reassuring the stock price has done well since Monday, as it implies that these investors aren't selling their original holdings, and hence the "new money" is long term too.
4) Many platforms will prevent buyers who aren't "sophisticated" or "professional" from participating in the broker option. Others may not have the contacts or agility to facilitate it.
5) The fundraise includes a "free" warrant with a strike price of 28.5p. I understand UK laws prevent ISA providers allowing investors to hold warrants in their ISA. I'd strongly suggest double checking with any provider who says they can accept it, to prevent the risk it later gets rejected.
6) It's been obvious for months that Agronomics needed to raise capital. They can't maintain their holdings in companies without participating in future fundraising rounds. To get it done at 22p, when the NAV was barely 6p (even if real value of assets was closer to 12p to 15p) is a fantastic deal for existing shareholders. The 2 year warrant at the 28.5p strike price takes away some of the upside, but could buy more time before Agronomics need to return to the market with another fundraising.
7) As a larger company, with a larger market cap, this will increasingly be on the radar of other fund managers = more incremental buyers.
8) For me, the only thing that takes the gloss off this fantastic investment opportunity is the RNS last week showing how Mellon has renegotiated his 15% performance fee to be even more in his favour. With the fundraise, the NAV probably increases to at least 11-12p (before his fees), but I think he now benefits from 15% of this rise on the new capital base. At least Β£3m+ in fees from this alone I think. And this 15% "Mellon tax" will effectively be the same on future performance and fundraisings. Let's hope he is worth it!