What is Notice Under Section 708A?

[FranckB]

Hi All,

I am very new to this site and trading all together. So please take it easy!
Recently i purchased EUC, it was making excellent progress until a particular announcement made it drop.
Been very new i am not sure what this announcement means. The announcement reads as follows:

"European Cobalt LTD has issued the following securities o 10th of October

The company gives this notice pursuant to section 708A(5)(E) of the corporations act.
The ahres were issued without disclosure to the private investors under part 6D.2 in reliance on section 708A(5) of the corporations act."

Is anyone able to explain to me, if this is negative and why it would this announcement would influence share prices?

Any help would be appreciated thanks.

 

[pixel]

Hi All,

I am very new to this site and trading all together. So please take it easy!
Recently i purchased EUC, it was making excellent progress until a particular announcement made it drop.
Been very new i am not sure what this announcement means. The announcement reads as follows:

"European Cobalt LTD has issued the following securities o 10th of October

The company gives this notice pursuant to section 708A(5)(E) of the corporations act.
The ahres were issued without disclosure to the private investors under part 6D.2 in reliance on section 708A(5) of the corporations act."

Is anyone able to explain to me, if this is negative and why it would this announcement would influence share prices?

Any help would be appreciated thanks.

If you google "section 708a corporations act", you will find - among other links - a reference to the Corporations Act. In general, the Act covers a company's obligations in regard to fairness and openness; 708A specifically deals with exceptions to the rules about disclosure to buyers of (new) shares.
When new shares are offered to the General Public, a detailed Prospectus has to be published with the offer, so Mums and Dads can study precisely what the cash is supposed to be used for. When shares are placed with "sophisticated and institutional" investors, exceptions apply; they're covered by 708A. But none of the exceptions would apply if you're a newbie. (Google "wnat is a sophistcated investor?")

Of greater interest is Appendix 3B, to which I do pay close attention. It provides a snapshot of the most current shares and options on issue. If App 3B refers to new shares issued to Sophs and Instos, it's safe to skip over 708A as "one of those things" puffed up simply to satisfy the letter of the law.