I would usually expect a company to capital raise after a recent spike in the share price. For example, 3-4 weeks after positive news which saw a 15%+ increase in share price. PTX has announced a capital raise when the share price is at a 52 week low, which is unusual. The reason companies are expected to do this is the price per share for the capital raise cannot be greater than the average of previous 3 days trading price. So more dilution is required to raise the desired capital at a lower share price.
This may not be all bad.... As Fibro suggested the capital raise may be funded by a pharmaceutical company, institutional or sophisticated investors which despite dilution would be a positive sign. In this case, I would prefer if retail shareholders are not able to take part in the capital raise.
On the other hand, if PTX has a retail capital raise at a 52-week low price it suggests no positive news is expected in the short term and funds are needed.
PTX Price at posting:
5.6¢ Sentiment: Buy Disclosure: Held
