Oops. Double post.
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Oops. Double post.
Seems speculation centered around capital raising .... haven't seen anything to give strong evidence to quantify that but if anyone has any info .... ahh. just found it on nzherald. Fair enough.
What are some of the likely scenarios for the announcement on Monday? What could happen to SP. Anyone preparing to buy or sell?
A capital raising is saying "we don't have enough cash in the bank to support our growth plans, so we need to get money from somewhere". Options are basically capital raising or debt.
This is not a positive for shareholders, in that your current shareholding will be diluted.
It may be positive in the longer term if the capital is deployed appropriately, and the value of the company increases sufficiently. This is a maybe, so at this point in time in my opinion, this is a negative sign.
To clarify, Xeros current valuation in my opinion is based on some level of success in the states. A capital raising seems to be saying that is unlikely without a big injection of cash.
Any thoughts why they are not raising debt in these low interest rate times?
A capital raising is saying "we don't have enough cash in the bank to support our growth plans, so we need to get money from somewhere". Options are basically capital raising or debt.
This is not a positive for shareholders, in that your current shareholding will be diluted.
It may be positive in the longer term if the capital is deployed appropriately, and the value of the company increases sufficiently. This is a maybe, so at this point in time in my opinion, this is a negative sign.
To clarify, Xeros current valuation in my opinion is based on some level of success in the states. A capital raising seems to be saying that is unlikely without a big injection of cash.
Any thoughts why they are not raising debt in these low interest rate times?
Could there be a scenario where we see a sharp drop in share price because of the announcement?
IMVHO...and to keep my consistency of comments consistent... if the belief is there, you have nothing to worry about. Afterall, Rod, Hamish, Sam and Peter have bucket loads to fund the cash flow with.
Then again, if they choose not to, then either offer more shares to the public to fund their cash needs - or, dare I say it, go to a bank. Looking at their latest balance sheet though and with interest rates tipped to rise ... which bank would take the gamble - on the balance sheet alone (ie - without PG's etc from the above)?
Tons and tons of "paying customers" ... but a $14m loss on a T/O of $39m? Cash burn is right ....
If they don't get this right .... there will be a stampede..... but that is just my take on it ...