This is all well and good, but, why could this not have been...

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NotFinAdvice

26 Posts.

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25/04/24

21:53

Post #: 73513856
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Originally posted by oke: ↑

'The stock is extremely liquid, any institution wishing to take a position can easily get one on market.'
- not without paying much more than 80¢
- BellPotter most recent analysis "Flying High' 15 April upped their target to $1 with assumptions on sales targets being met! So Cr is a reasonable 20% discount. say the stock had flown to $1.50 on Trading halt ..they couldn't of raised $100m at $1.20 (20% discount) now could they.

We last closed at 83.5¢ that 4.3% above CR so those feeling sorely done by have little to complain about

Unlike an SPP, theres an underlying assumption that a CR to Instos and Sophs is entered into with rigorous due diligence and some privileged insights and so establishes a valuation, 80¢ in this case, that has been issued at a discount to true present value.
The financial elite are not going to buy in to a CR unless its at a discount to true valuation.

A$100m raised at 80¢ is a huge endorsement ,,and now that they, the pro's, have some skin in the game they will be incentivised to support the share price.

I understand many are upset,, but the reality is that this CR structure is what is needed for the next stage of growth.
When a prospective client does due diligence into Droneshield one of the first checks will be cash balance, cash burn /qtr and the top 20.
On that basis the CR will be a greatly increase the chance of securing outsize contracts.

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This is all well and good, but, why could this not have been achieved via a pro rata rights issue at the same 80c price which was sub underwritten by these same institutional investors so that retail investors were not forcibly diluted?

The whole reason this raising is 'a bad raising' is because existing investors have been forcibly diluted. You can wrap it in whatever nice language you like, but it doesnt get away from the fact that the structure itself was botched. People should be unhappy about how this has been carried out.

Last edited by NotFinAdvice: 25/04/24

DRO Price at posting: 83.5¢ Sentiment: Hold Disclosure: Held
7 Upvote

3 Great analysis

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