Carabella Res Ltd Nsw CBLLF

Questions about Cobalt 27

[Bingle]

I'm looking into battery metal stocks and I've been waiting for Cobalt27 to dip so I can buy in. Can someone explain to me why it's dropped so much today? Isn't the news good? Also are there any downsides to this stock that aren't obvious? Thanks all.

[gwalker]

Cause they did a large private placement attached to this deal at $9.75. Why pay $11 when you can buy in at $9.75. Thus the sell off. But considering the hammering, retail can do one better and get it now $9.55 This is a large deal, but it wont come on stream for about 4 years

[PeterHH]

The stream is compelling but dilution at such a large discount is concerning.  Stock was as high as CAD 13.50 in late March..... I wouldn't necessarly be concerned with the dilution if management and/or the board had a lot of skin in the game.  They don't appear to..... At CAD 9.75, ouch. I'm not an owner yet but definitely digging deeper.  Could be a huge opportunity

[run33]

It comes on-stream in 2.5 years, and will be priced in long before then. This is a huge company maker, I had no interest here until today now I am loading the gun.

[PeterHH]

So based on today's closing price, which is below the bought deal for the $300M ($9.60 close versus $9.75 bought deal) the market cap of the company will be $787M CAD.  To put this in perspective, the cap was over $700M in March based on the $13.60 share price before any of this.  Meaningless fact but a clear sign the market doesn't like the $9.75 CAD dilution.  No surprise

[Justreality]

For what it is worth -the underwritters are still sitting with 40% of this deal. I am short at 9.70 and hoping to cover on re pricing.

[bumblebee99]

How do you know that they@re sitting on so much stock?

[Justreality]

Rumours rumours rumours. Clean up just announced at $9.15 at least 40% maybe 60% was unsold  sorry if you are long was short and will use the clean up to cover

[lumpy13]

What's strange is that Wheaton took a larger share of the cobalt stream and the market reaction hasn't been as negative.  Can understand the share price dropping to C$9.75 but not sure what's going on behind the scene to make it drop lower.  If problems by the underwriters in unloading shares, would assume this will be more of a short term issue as the long term price outlook

[finginny]

Please can you provide a link to this news, google not being helpful. thank you.

[lumpy13]

https://www.stockhouse.com/news/press-releases/2018/06/28/wheaton-precious-metals-announces-closing-of-the-cobalt-streaming-agreement https://seekingalpha.com/article/4183006-wheaton-precious-metals-stuns-market-new-cobalt-stream

[LittleHedge]

Bought deal financing always has an impact as short term / day traders are not willing to hang around a couple of years to reap the rewards... so the stock usually tumbles to around the price, weak hands (and day traders) dump and deal with their losses. The long game here is interesting given the space they are in.  It is very possibly a good opportunity to buy at a discount as in these