Buying in after SPP completion

Mickymouse · 24 January 2021

Howdy,

Buying ordinary shares in a company after spp is completed meaning after the company has issued a spp and the shares have been allocated to their holders does this generally mean the share price will go down ?

Sure! whoever participated in the spp will start selling and take profit but can the price go up right after spp completion ?
Any examples?
Thoughts ?

againsthegrain · 24 January 2021

Mickymouse said:
Howdy,

Buying ordinary shares in a company after spp is completed meaning after the company has issued a spp and the shares have been allocated to their holders does this generally mean the share price will go down ?

Sure! whoever participated in the spp will start selling and take profit but can the price go up right after spp completion ?
Any examples?
Thoughts ?

If the holders believe the spp is for a good project and will add value to the shares then they will hold, if they have been taken for a ride and waiting for a exit a spp is a good way to average down and run I guess.

Every company is different, sometimes after the spp is done a good ann is released and the price goes up, other times shorters or day traders will dip the price.

If you bought in after a spp you bought on some fundamentals I guess, stick to those if you believe the company is good value at current $

dyna · 24 January 2021

Don't know,but you'd have to think the SP would fall because most of the take- up in the SPP is from Instos.You'd have to think, they would always be looking at realising a quick profit.It always surprises me how few of the mums and dads,even bother taking up their entitlement.Generally,I wait a bit,12 months or so,just to save a few bucks on tax!

The Triangle · 24 January 2021

I have always been able to purchase shares within a few months of a SPP/Raising at a lower price. (TGR, MCP, HPP, FWD, ORI, HUM in the past year or so for me). I usually look for companies who have recently done a raising and wait for the fall.

Typically If I am already invested I sell out when a SPP is announced and then reinvest later or I do not take up the SPP and average down later.

Select harvests recently did a capital raising at $5.20 and shot up as soon as it was announced - but after 3 months its back to below the raising price. I have a gut feeling that usually the more speculative companies tend to go up with a raising as it makes them more viable?

Mickymouse · 24 January 2021

To be honest if I was offered a discounted price (depending on the discount) in shares that I already hold I'll probably be the first to take a quick profit and rebuy into the spp. And then rebuy more after the instos start selling and drive the price down. But does it always work out that way ?

dyna · 24 January 2021

Hard to say,but you can bet all these companies have a whisper in the ear of their major shareholders before announcing a SPP,just as they did back in the renounceable share issue era.

againsthegrain · 24 January 2021

dyna said:
Hard to say,but you can bet all these companies have a whisper in the ear of their major shareholders before announcing a SPP,just as they did back in the renounceable share issue era.

Definately, its far to common to see a spike in volume for a day or 2 before a spp

Steer · 30 April 2021

The Triangle said:
I have always been able to purchase shares within a few months of a SPP/Raising at a lower price. (TGR, MCP, HPP, FWD, ORI, HUM in the past year or so for me). I usually look for companies who have recently done a raising and wait for the fall.

Typically If I am already invested I sell out when a SPP is announced and then reinvest later or I do not take up the SPP and average down later.

Select harvests recently did a capital raising at $5.20 and shot up as soon as it was announced - but after 3 months its back to below the raising price. I have a gut feeling that usually the more speculative companies tend to go up with a raising as it makes them more viable?

Couldn't agree more Triangle. There is no science to their investment choices. They just take whatever IPOs they can get their hands on. I foolishly invested $15,000.00 with them. Last time I checked it was down to $13,000.00 and finding what ones investment is worth is like getting blood out of a stone. I took up an allocation in Payright with them. It dropped like lead on listing by 50%. So bad ASIC should investigate them

Buying in after SPP completion

Similar threads

Privacy & Transparency

Privacy & Transparency