Post by
Margin321 on Apr 29, 2024 2:31pm
Bought Deal Offering
At this point I hope they get the 9 cents canadian and do not pull a re-price.
It is so annoying how this unfolded.
April 21 RHC (Andrew) did presentation on Radius about Val Marie and took questions: At 21:29 Martin Gagel reads a question :"Does Royal have sufficient capital to maintain operations with Steveville or will there need to be another capital raise?" And Martin adds," I guess in the near term".
Andrew says: "Companies at this stage never have enough capital as they would want, I'll leave it there." Then Andrew continues: "We are making revenues now. We have money coming back at us multiple times a month from our customers. We are in better shape than most ."
April 25: RHC announces bought deal public offereing with major dilution, especially at 9 cents and more dilution later at 12 cents. How can he possibly say "we are in better shape than most" when the financing was already done and likely the press release had already been written and sent to the parties and their lawyers for review.
This does not seem right, especially as the shares had already been trending strongly down for weeks and the company publically stated they had no idea why, and then unexplainably there was NO appreciable boost from the Val Marie JV which was a tremendous major milestone.
This is everything that is wrong about trying to invest in small mineral and resource companies in venture capital markets in Canada where discoveries and milestones are not rewarded by appropriate re-rating of share price so that significant capital can be raised at higher and higher share price by selling fewer and fewer new shares.That is how it should work and how it used to work. Not all the companies did well, but the ones that had major discoveries or hit other important milestones moved up. Instead now share prices just continue downward despite discoveries and milestones, new offerings come at lower and lower prices, with huge dilution, destroying value for long term holders and not raising much capital for the companies. In this case it was even more egregious. The share price slid down sharply in the days and weeks right before the offering. There was a major positive milestone right before the offering that had zero impact in the market, and the CEO gave the remarks above (in public response to a question) only 4 days before the offering.
In London they are talking about selling AIM market (similar but not ecxact same problems) to NASDAQ. Maybe TSE should also sell TSE Venture market to NASDAQ. Maybe NASDAQ could better regulate the market, get rid of algorithmic trading below a certain market cap, totally end short exempt status for just renting a pipe to back office to do algorithmic trading. What is going on is not good for investors, not good for companies, not good for canadian economy. In my opinion.