Market Did Not Take Equity Issue WellOn January 25 (after the fallout from the announced lawsuit seemed to bottom) EXRO closed on the TSX at 1.67.
The following day (January 26), EXRO closed up by over 15% to 1.93, so it appeared that the market had already baked the lawsuit into the cake with the corresponding plunge in the share price over the past couple of days and decided to boost the share price by a sizeable amount.
Then, after markets closed on January 26, EXRO issues a press release stating announcing a 15M (soon to be 17.5M before market open the next day) Bought Deal Public Offering at 1.60 per unit.
So how did the market take the news of the equity raise at 1.60?
By plunging the share price all the way down to around 1.50 per share immediately after market open, then bouncing it around between 1.45 and 1.60 before closing at 1.51, a decrease in share price of over 21% for the day.
Thus, it appears the investment community was very disappointed with the equity raise at 1.60 and smelled desperation on the part of EXRO to get a cash infustion immediately, and responded by trading the company's shares at a lower price than the equity offering and letting it close over 5.5% lower than the 1.60 unit issue price.
Wow.