The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Good point raised by Swanny. Thinking on my feet here: 1. Very few investment funds have a prospectus that allows them to buy with a deliberate view to selling again within 3 days. Almost all invest to make money, rather than trade. 2. A fund with a short term view would not care about the call options or about realising shareholder value in the portfolio investments, for the simple reason they'd know they'll be gone before any of that makes a difference.
Is that subscription good or bad? That partly depends on your predisposition. Some on here are predisposed to find the good in every step, others always find the bad.
So: You could focus on the fact that 10p is at a discount to last night's close
Or you could notice that
1. 10p is a significant premium to 7.5p, and the company had hoped for more at the 7.5p raise than they got. This new investor delayed subscribing, and as a result had to take a higher price. Yet they still considered this a good entry.
2. This is an investment fund lumping in the kind of sum they'd never be able to obtain on the open market. A new institutional investor of this kind signifies confidence. They will have done their research and due diligence. We'll find out who they are soon, as the amount they've taken is notifiable.
3. This keeps the wolf from the door. One refrain on here has been that they'll place again soon, blah, blah. Well, now they're £1.5m further away from needing to do that.
4. Reading between the lines, it seems that this new investor is interested in TERN as a vehicle to hold Wyld. Wyld is listed in Stockholm, so perhaps this fund is only allowed to hold UK listed companies. Regardless of why, this means that both the RNS this morning are actually about Wyld's commercial launch. Wyld is currently a strong member of the TERN portfolio.
That's a great interview, thanks. The WYLD share price chart is also looking very healthy - currently breaking out at 17 SEK, and the volume on Monday was the highest it's been since just after IPO.
Interestingly, Mellon's £1m CLN converts into near enough 1/6 of his current holding. So him not taking part is more a case of him having already subscribed in full for his part, and it's up to everyone else to decide what to do about their 1/6. I haven't done the sums to work out if 1/6 of Mellon's current holding is included in the number of shares available or not (so: Are these an automatic tranche available as excess entitlement). I certainly plan to subscribe for my full one-sixth, and then a few multiples of that again as excess entitlement. See how many I get.
Correct, CREST holders will have their entitlements notified as soon after 8am tomorrow as possible. Halifax will hold through CREST, so they will be able to show you your entitlement once they've processed the notice they get tomorrow morning. Patience is required.
Shares have a "nominal value". CNR have a nominal value of 20p. The company can issue new shares at 20p, or at a premium (20p plus some extra). They cannot issue new shares at anything less than 20p. So you've just been notified of the accounting manoeuvre to change the nominal value from 20p to 0.01p, so that the planned issue at 15p can proceed. What happens behind the scenes is that they split each 20p share into two - one for 19.99p and one for 0.01p. Those two shares are in different classes, so that the 19.99p carries no voting rights. They therefore are of no value to anyone, so they effectively get thrown away. You're left with exactly the same number of shares you had before, but the nominal value is 0.01p rather than 20p. To do this, they need a vote at a general meeting.
But all of that will happen in the background and won't change the number of shares you hold, and that piece of gymnastics will not by itself alter the price your shares can be sold (or more bought) for. So nothing to worry about.
I heard someone say these are the highest grades ever reported in the London market. They are extraordinary, so I have no trouble believing that claim.
As I understand it, if you put in for 1/6 of your holding (as of the record date), you will get your full allocation no matter how fully subscribed the open offer is. The way to get a guaranteed chunk of the offer is to hold 6x what you want. However you can also put in for excess entitlement. As long as you hold one share of Condor on the record date, you can do that. That is the one that will be scaled back assuming the open offer is over-subscribed.
Electric Lion: "The Company expects the Fundraise, assuming at least £1 million is raised through the Open Offer, to fund the Company through the sales process as announced on 22 November 2022."
especially given that scenario plays out only if the whole thing has failed, meaning crystallising huge losses on his existing 18% holding.
The other thing to say about the coupon rate is that it's only the backup plan, and Jim clearly does not want it ever to apply. He is not lumping in at 15p in the hope of an exit at somewhere between 17.5p and 18p
Spot on, electric lion.
The £1m keeps things going for a couple of months. To get the sale process through, they need more. They haven't told us how much, but I'd say the total is between £2m and £4.2m. Most likely, £2m is enough. More is offered to give us the same opportunity as Jim.
If enough take the open offer, the plan is on. If less than £1m is raised in the offer, they don't have enough to execute the plan. The loan note with its coupon then becomes Jim's insurance plan in all this.
So if investors (not just us lot, bigger holders too) want to see the sale come off, we need to take our offer shares, to a minimum of £1m.
Here's what I think has just happened.
They'd been having offers of interest to buy the assets. To fund the company through the process, they needed some more cash. They were lining that up on a secured debt basis, when US sanctions hit the country. Confusion it would affect us led to a share price drop, which made the deal unworkable.
Jim wants the sale to go through enough that he said to the brokers "I'll put the money in to keep the company going. If a sale goes through, I'll more than get it back.". He must be confident it will go through. The board as a whole decided it would be fairest to existing holders if we were also allowed to take new shares at a 1:6 ratio. Jim agrees. Effectively, his £1m is his open offer take-up, which is why he's not taking them again in the offer itself
Two more adjustments got made. There needs to be some reward to reflect the size of the risk he's taking relative to other holders, and to compensate the opportunity cost in letting others share his very good entry price. So warrants were added for him. We are more risky than him taking the lot (what if they don't get the £2m they need at a minimum?), so his part is structured as a CLN that converts instantly. That way, there's no short term risk and they get £1m cash straight away without having to wait for a subdivision EGM.
It's confirmed that these funds are sufficient to get us right through the sale process. That kind of confirms the plan I've just run through. It also puts a tighter timescale on the sale than we had before.
The record date is Thursday, so the ex date is Wednesday. I expect an initial drop as people misread this as a bucket shop placing at huge discount. I then expect people to want to be in this for the 15p shares that Jim is so confident will give him a return, so buying will take over fairly quickly.
That's my 0.01 penneth of thought. DYOR and GLA
With volume behind it - we've had more volume go through by 10am than on the entire day any day last week. I'm always more encouraged by a rise when it's backed by decent volume.
Thanks, yes of course. Have we heard any more on timing for that to complete, or timing for publishing the associated prospectus
@MetalHead, why are you saying we currently own 50% of Kanye?
I see people reporting that the Primary Bid offer closed earlier than expected. The RNS explaining the offer said, "The Retail Offer is expected to close at 8 p.m. on 5 October 2022.". What time did it actually close in the end?
We'll see if it drifts back to 9.5p. Of course, drilling is not the only next news we will get. We will get assays from the recently completed drilling campaign, the soil sample results from the rest of North Hemlo, the VTEM re-interpretation by PG&W at Esa, the rock sample analysis from Enable, the assays from the rock samples at Coco East, and the soil / rock assays from Magical. I've probably forgotten something, but we're not waiting for thaw before anything more gets done or announced.
That theory doesn't stack up.
Palladium One also announced this yesterday. https://palladiumoneinc.com/news/2022/palladium-one-discovers-new-zone-with-massive-nickel-copper-sulphides-at-the-tyko-project-ontario-canada
It's one thing to suggest that a newly listed London company with an £8m cap deliberately withholds news to let insiders sell some first. (There's no evidence for that, is there?) It's another to suggest that a $60m cap well-established Canadian company, with a solid reputation and some large investors, colluded in such a plot.
Also, there's no hint that the grades are underwhelming. In fact, Palladium One seem quite excited.
>> Brad Lazich, P.Geo., Exploration Manager for Palladium One’s Canadian operations, who was integral to Glencore’s discovery of the Norman West deposit in Sudbury, was onsite when the discovery was made, commented “I’ve seen a lot of pentlandite in my day, but this takes the cake!”.
The 1.04% you mention is not the grade of what FCM / PDM.TSX have just dug out of the ground. It's the grade of a hole 2.7km east of ours from 2016, where the working hypothesis is that the JV area extends that showing and so is worth exploring further.
Why did it drop a bit after news? Probably just because the news gave the share price a lift (it rose sharply at 11.30am yesterday), which gave some 10p IPO holders the opportunity to take some risk off. It's the first time they've been at a 30% profit and had the opportunity to take a bit off. That's to be expected.
Why did it rise before the news? I don't know. But there was a lot of chat in Telegram groups about some of the videos and interviews the company had done. I just think news of a new company was beginning to spread, and people were taking positions.
I'm hoping yesterday's news, and the rise that came off the back of it, will continue to get it onto people's radars, and will see volumes and price continuing to rise gently while we wait for the next developments.
I'll try and find it. I suspect he means that they need to find a company wanting to come to market, and an improving market and political climate will make that process go more smoothly. The past 6 months have been a tough climate for companies wanting to list. If I find his comments, and have more to add, I'll comment further.