Just been looking into this Springtree deal and it appears that whilst beneficial to the company for working capital it is not beneficial to share holders. Springtree are not an investment company. Their method of operation is to sell issued shares as soon as possible for a profit taking advantage of the 30% lower issue price. Hence the increase volume and falling share price. I emailed Brett Manning last week and he advised that he monitors Springtree sales to ensure that they are not dumping shares on the market in large tranches but I am sure from watching sales and market depth that whilst they are not dumping large amounts of shares they are continually replenishing sell lines at 8c over the past few weeks and now 7c this week. Their last issue in August was at .0746c. The next issue if it occurs will be around 6c so be prepared for the share price to go sub 7c in the future. FWL would be better off issuing shares to sophisticated investors because they would be unlikely to dump all issued shares on the market. Just my 2c worth anyway. Have a look at the DYE thread to see what they think about deals with Springtree and I am sure there are a lot more companies suffering the same fate.
LCG Price at posting:
6.3¢ Sentiment: LT Buy Disclosure: Held
