I think the lack of liquidity is due to the following:
- There are a lot of longterm shareholders who are sitting on massive losses, that recently took up the rights issue at 2c, so they are not looking to buy any more shares, and because they are sitting on massive losses, selling them for slightly higher than 2c doesnt really appeal to them. At the same time, with the price of gold sliding, there is not a lot of interest from outside investors wanting to jump into Gold Stocks.
- There are a lot of people just waiting to see what happens to the SP, as to whether 2c is a solid bottom, or if the SP happens to drop past that point.
- The stock has been such a lemon over recent years, there is not a lot of confidence about TAM at the moment, so people are being cautious.
I don't think the Capital Raising had more to do with the 2 main shareholders wanting to increase their holding, however that is probably a bi-product of the main reason.
The company simply had no cash, as they company had wasted and burnt a lot of cash over the last few years.
Also Allied are so heavily invested in TAM, that it was probably also a matter of protecting their existing investment. Hopefully not a matter of throwing good money after bad.
In regards to how many stocks allied took up, I think it looks like below:
There were a total of 587,548,523 on offer
Existing Shareholders took up 338,073,205
This left an overall shortfall of 249,475,318
Allied had rights to first shortfall of 157,500,000 shares
Gerise had rights for 57,500,000
So there was a remaining 34,475,318 shares that hadnt been taken up. I am not sure what happens with these shares, but my guess would be that Allied will take them.
TAM Price at posting:
2.2¢ Sentiment: None Disclosure: Not Held
