Well rights issues to fund expansion/acquisitions are all the rage at the moment. Corporate Travel and Webjet to name a couple.
The difference being that those companies are less speculative, have a proven track record and shareholders are more confident that the company can deliver. The rights issues creates demand for stock before the record date and shareholders win.
So tomorrow, management will sure up support by reporting December sales figures (I anticipate this as a positive) and update on the capital raising arrangements given the modest fall below the issue price. Yes management didn't take into account volatility in this stock due to the large number of nervous investors.
I remain positive and a holder, but of course will be watching it carefully tomorrow after taking in the update.
