Quick maths the post dilution share price at about 0.34p for Tissue Regenix
You have about Ā£5m company currently, so based on share price of 0.44 means nearly 115m shares in issue.
Another 4,800,000,000 shares will be issues IF they get the bookbuild away at 0.25p to raise Ā£12m
So youāll have a company with a āvalueā of Ā£17m with nealy 4,915,000,000 shares in issue = about 0.34
THEN supply and demand will take hold and the share price will move accordingly.
āPlacingsā unlike other forms of corporate action are not pre-emptive. Hence why brokers donāt always offer you the chance to participate and why services like Primary Bid spring up to fill this gap for Retail clients. Fine. All good.
There is usually profit to be made. But itās not always the pot of gold it seems. IF you can get out instantly at the approximate post issue (diluted) price, then you may well make money. But the split second that market starts trading supply/demand is gonna kick in and it could go either way. Companies raising such sums need the money for something. If that something is positive going forward, all good. If that money is ultimately to support a failing business, well, it could go either way.
DYOR
10th June these new shares start trading with the currently issued. So letās watch that price.
Thing is I cant find a plan for what IWG plan to use these funds for. Itās obviously a company that will be under a lot of pressure over short term, stock price raising seems rather speculative. That said I wish anyone who took part in the primary bid offering the best of luck!
Yep, IWG claiming āM&A opportunitiesā. Cool. Fine.
Post placing price I calculate at more like Ā£2.58, so about the 8% discount claimed on the placing document. Ā£320m into a market cap of Ā£2.6bn is pretty small anyway.
You would have done pretty well picking up the shares in the open market before today - but, sure, the placing,would have offered a moderate discount. IWG officially opened at Ā£2.59 (so close to my basic maths) this morning. The rest is market forces. It could have gone either way.
I used to work for an organisation that got our Retail clients in on the placing. It wasnāt difficult nor we were we absolutely precluded from participating. We didnāt need an intermediary. Fill out the forms manually or electronically, make your CREST entries if you have the ability (talkwith your outsourced operator if you donāt). Bam!. Cash debitted, new shares arrived. Simples.So unless something has materially changed in legislation Iām not sure itās entirely true to say Retail punters canāt participate. Itās just a little harder to. So good for PB for highlighting.
Also the CEO is putting about 10% of his net worth into it, Ā£90m, so that seems like a good sign.
@adam Hi Adam, is there a timeline of when you will be setup to receive Primary Bid shares? Maybe it could go on the road map. I probably wonāt be using them again at the Ā£20 settlement fee.
IWG is betting that a recession will mean more demand for short-term, flexible facilities, while social distancing requirements will encourage established companies to increase their office space.
I will yes, but a small gain only. fee is Ā£20 not 20% 8.1% discount from yesterdays price which was Ā£2.58. Price today is Ā£3.20 (at time of writing) Risk is obviously that share price may dip below the discount price, but thatās a risk whenever you buy. Interesting venture but obviously not really worth it at these small scales - I should profit around Ā£6 lol. Iāll be selling these ones as soon as they come in (assuming price doesnāt dip too much) but Iāll definitely jump in more for any stock they do thatās more interesting - Iāll probably only buy if the price is fixed too.
Yeah, that was a little odd, seems roughly 50/50 split on the offers that do a fixed discount, and those that donāt.
Downsides to PrimaryBid:
Mostly smaller companies you wouldnāt normally consider investing in (mostly not so great AIM stock)
Ā£20 fee to consider on top of share price you invest in.
Not integrated with a huge amount of traders yet. (Through in theory, as long as your broker offers that particular stock, they should be willing to onboard itā¦Iām experimenting with that right now lol)
Some offers are fixed discount, some only confirm once deal finalised, no ability to back out if you arenāt happy
Upsides:
Stock at cheaper than retail prices
Transactions seem fast
So a really interesting concept, but one to be treated with caution, Iād suggest only going in for stock you would want to buy normally. As @finki has said elsewhere in the thread, DYOR
Also a settlement lag.
So you canāt sell immediately even if you wanted to after placing shares issued.
Looks like PB usually expect settlement to be T+5.
Not a deal breaker just something to be aware of.
Looks like they outsource operations to Jarvis.
So ultimately your looking at a single CREST transfer transaction to get this stock to your FT account in the same way they already do to JL, AJB etc for the Ā£20 cost
Is that a reasonable price in your opinion? I donāt mind it in theory as its their only profit from me, but interesting to know if its about right or expensive for what it is
Ha!
It is what it is.
Message cost alone will be about 50p
Human time cost will be about 30
Seconds if the DEL message even needs to be manually punched in to CREST. If itās automated then 0 seconds.
System cost will be Ā£x,000ās per year. So how can you break that down and apply it to each transfer? Iām not sure you truly can with accuracy. So it amounts to waiving your finger in the air.
In short ā itās a business decision based on some loose maths. I assume PB has done this and concluded Ā£20 covers it. Then it will come down over time as the economics change.
Makes sense - like you say, human time, licencing etc are the greatest costs
Only asking out of curiosity btw, I factored the cost into the deal & would do next time too - Iām not a person that gets angry just because a company wants to make a profit - thereās nothing in it for them if they donāt!
Primary Bid says it does not make any money off the investors. They are paid by the raising companies. The Ā£20 fee appears to be charged by the broker.
Yeah, saw that.
Do you think that means Jarvis IM (as PBs administrator) levies the charge? I assume so. Still, fair(ish). Someoneās got the admin burden to haul the issued stock to your chosen broker.
Ha! I was in exactly the same boat when I read it too and was hoping a discussion would pop up.
Those who got in on the IWG offer at 239p must be pleased though? Currently at 304.60p. Itās nice to see a site/company opening up these offers to the public instead of just the banker class. That said, all the others that Iāve looked at seem to have gone the other way.
