Chief,1. Yes, hopefully Bell Potter clients prove to be more...

Chief,

1. Yes, hopefully Bell Potter clients prove to be more steadfast than Pattersons'.

2. I just looked back to 22 October 2010, when there was a Share Purchase Plan (SPP) announcement. The offer was due to close on 23 November, but closed oversubscribed on 19 November. I'd consider that to be inspiring support from shareholders.

The share price offered was 3.2c, which was said to be a 15.6% discount to the share price for the 30 days to 19 October. Back-calculating, the "average" share price was 3.2c/0.844 = 3.75c. During the 30 day period, the price trended down to a low of 3c at about the end of September, then fortunately recovered strongly to 5.5c by about 19 October. After this rise, the offered price of 3.2c was at a very attractive discount of about 40% to the share price at 22 October, which was about 5.4c. This discount might (at least partly) explain the over-subscription.

In the recent placement there seems to have been a similar late share price rise prior to the announcement of the placement, reversing what had been an interim downtrend. This likewise increased the discount represented by the placement price, and may have happened in time to encourage buying by clients.

If there's a point to all this, it's that many potential buyers would evaluate the attractiveness of an SPP or placement primarily in terms of the share price and trend right at the time of offer, and would be relatively disinterested in what had happened a month before. If I was, say, a broker with access to bots, and if it was legal to do so, I might try to engineer a similar late uptrend that would produce a peak price near the placement/offer dates.

Of course I'm not suggesting that Bell Potter or GRM worked that way, I'm just idly speculating about an interesting strategy inspired by a couple of random observations.

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