Peoplein Limited

ASX:PPE

Peoplein Limited

ASX:PPE
TradeAdd trade order Follow Unfollow Set Price Alert
$0.810 (+1.3%)
Last close price
#145
Rank
6
Held by
20
Followers
TradeAdd trade order Follow Unfollow Set Price Alert
Reports (3) My Report Forum Investors
Forum Topics PPE PPE Capital Raise
CanadianAussie
Added 5 years ago

PPE had a recent institutional capital raise equivalent to 17% of the current market cap.  At completion, the shares rose to close at a 45% premium to the raising price.  With a retail captial raise (and further dilution) around the corner I would have thought prices would have stayed pretty flat or possibly fallen.  They're still trading well above the issue price of $1.10 (currently $1.415).

I'm still fairly new to investing so the answer may be the most obvious one - Is the price premium to the capital raising price purely based on how highly the market views this company?  I tend to think of shareholder dilution as a negative and was surprised by this result. 

Thanks

0
Strawman
Added 5 years ago

That's pretty much it. Post raise, investors have ascribed a higher value than the offer price because (presumably) the company's prospects justify it, even allowing for the share dilution. After all, the balance sheet is now a lot stronger. But the raise required an attractive discount to encourage investors to tip in more capital in in the first place. At any rate, what the market does isn't always rational :)

1