RE:RE:RE:RE:RE:RE:SGYYes, you are partially right. See my previous comment. They turn down deals all the time that they think won't sell well. They wouldn't take one on that they couldn't sell.
The ability to sell an issue comes down to two factors that intersect. One is the quality of the company/chance of share price increase. The second is the deal. The worse the quality of the company, the better the deal has to be to make the bankers think they can sell it. For example, the company may want to sell a bought deal above market, but the bankers say no way it sells and tell them to take a hike.
So they come back and say they will do the issue at below 3-5%, and then the bankers are more interested because that is something they might be able to sell on a weak company.
Or they do a flow through. Or some other things like rights or warrants or debs.
That is why the share price went down today. The short form prospectus for flow through shares were issued as a bought deal (good), but at a price way below market for flow through shares (bad). Flow through shares on a good company with good prospects should go for 20-30% above the market price.
Countrin2tive wrote: OK, I'll assume you're right, and of course they have to sell the stocks. However, I find it hard to believe that they would risk $20 million without doing DD. After all they don't make any money if they can't resell the stock.
Further, if they are flogging stocks to their customers, How could they not know something about stocks. Only makes sense. You say you were in that business, how did you sell stocks without being able to make some sort of recommendation? Otherwise, you would have to say I dunno.