On the other hand, the fact that the CEO sold a bunch a couple of weeks prior is a yellow mark. Not the kind of behaviour you'd like to see as an ordinary shareholder.

This is a such an awkward position to be in.

I love what AD8 have done and are doing but I can't justify the current share price (even at the SPP price) to add more.

But then again I don't really want to be diluted...

Will mull over it for the next month and decide...

If you think it’s overvalued it’s not that awkward is it? As a fellow holder I won’t participate but might top up if SP falls… at least the dilution at this price is much less than it would have been 12-24 months ago

im surprised they need the $, not surprised by raising at this price though lol

FWIW Macquarie has released a small update today and are maintaining their Outperform rating...

Audinate

A$50m placement & A$20m SPP

What's new

Audinate has announced a fully-underwritten A$50m placement at $13.00p/s (9% discount to last price), accompanied by a $20m Share Purchase Plan (SPP)

Assuming the same price and that the SPP is fully subscribed, this raise represents ~7% of issued equity. Pro forma cash is ~$90m (net of transaction fees, ex-SPP)

Why it matters

Acceleration of organic growth opportunities. Strategic investment in Audio and expansion of both the Video and Cloud strategy to capitalise on strong opportunity set

M&A pipeline. Focus on Video & Cloud strategies. Commentary cites a pipeline of opportunities has been identified. These opportunities are intended to accelerate the next phase of growth. We are aware that video is a fragmented market, and the current funding environment may have presented compelling opportunities

Guidance unchanged. Guidance is unchanged at this stage

What now

While limited additional detail was provided with this update, the confirmation of a pipeline of identified M&A opportunities and reinvestment for organic growth are an endorsement of the strong opportunity set and investment thesis. Reiterate Outperform 

DISC: Held in SM & RL

My quick take, which aligns with what others have already said, is that this is a good move IF there are genuine and compelling investment opportunities (organic or inorganic).

While it's unlikely there's any grand conspiracy here, it's not a great look to see the CEO sell shares at $13.66 a week and half ago, and then raise at $13..

EV/EBITDA of >90 on a pro-forma basis. Not exactly cheap (although could be justified if the funds are invested well and high growth maintained), and while the dilution isnt insignificant, it's not massive either. Something like 6-7%

CEO selling before the raise not very good governance.

But I guess we can give governance a pass when the investment thesis of network effects are huge?

Network effect v governance, tough call.

@Strawman is it not more than not a good look?

A week and a half ago he must have known about the intended capital raising. These things take some planning. It was certainly price sensitive information, therefore he sold shares at demonstrably a high value and to his advantage, while having price sensitive information that other shareholders were not privy to.

Isn't there a simple and more precise description of that practice?

ha, maybe "egregious" is closer to the truth @mikebrisy

I haven't looked, but could there be a limited window in which management are able to sell shares. So maybe -- and i'm just trying to play devil's advocate -- he always intended to sell some shares, and only had this limited opportunity, so took the chance when he could?

Also, in the grand scheme of things, he sold 2.6% of his holding (less if you count performance rights). For that he realised $706k -- only $34k more than if he had sold at $13 (and the market may well trade above the raise price when trade resumes). For someone who is worth tens of millions, it's really a rounding error (I wish I could say the same!!)

Anyway, I don't want to make excuses for the guy. Like I said, it's not a good look. But in the grand scheme of things it's not something that I would read as a loss of faith in the company's prospects.

We can all forgive him if he takes up his entitlements in the CR...

Worth checking if CEO or CFO wants to do straw-meeting. We can ask them what kind of investment opportunities they see.....and its been a year i think

Also would be interesting how responsive ASIC will be to the insider selling and CR announcement in such a short space of time.

But knowing ASIC I think it is highly probable they will give Aidan a jail free card.

I really like AD8 but this sort of behaviour is putting me off as a potential investor as it potentially shows a lack of empathy.

As I rate governance very highly even if it means missing a few opportunities.

My view only and understand from reading other threads others has a half-glass full view of the events which I respect.

On the flipside it will be interesting to see what sort of opportunities they are pursuing with the new capital as it doesn't seem AD8 is disclosing much information which is a bit unusual for a company that maybe does not do much high security type sensitive work.

ASIC won't do jack, imo. The lawyers would have signed off on the transaction and the rules are pretty soft anyway. In all of history there have only been a handful of successful insider trading prosecutions (even though I'm sure it happens all the time). The fact you often see the market price react *ahead* of big market sensitive news tells you everything you need to know.

Makes me sick, frankly. But I guess it has always been thus -- those with money & power just play by different rules.

In regard to the raise, I'm sure this is entirely opportunistic. It wouldn't have happened if the price didn't spike 40%-odd after the recent results. And you can bet the phone was ringing off the hook from brokers who were keen to facilitate the raise (and clip the ticket).

It was UBS and Canaccord Genuity who won the deal. And it's a juicy one:

That's almost $2.5m in fees. AND Audinate pay their expenses on top!!! Good work if you can get it.

Also, "incentive fee"? Please!

Let me count the ways in which I miss Mr. Carlin! The GOAT for me :D

Agree @UncleWally. I hope there will be a scale back if oversubscribed - I'd be peeved if they decided to keep the extra as Droneshield did recently.

Very hard to know how much to put in if they may/may not be a scale back - so much so it might just be easier to do it on-market.