I generally avoid blue sky, or story stocks, as my experience of the dot.com boom & bust in 1999-2000 has taught me that very few (in fact, hardly any) story stocks actually deliver on their promises. Even if they do deliver, it's usually years behind schedule, and many dilutive fund-raisings later.
That said, the financial memory is reputed to be around 15 years, and we are in a bull market, so there may be another opportunity to make hay whilst the sun shines, possibly?
Angle (LON:AGL) has always intrigued me, as they are developing a non-invasive method of screening for certain cancer cells in the blood, called a Parsortix device. The shares have recently spiked up, more than doubling in price to 65p. Another Placing today has put the dampener on that a bit, with 10% more shares being Placed at a not unreasonable discount (considering the recent huge upward move in price) of 17.4%. So the issue price is 50p. Shares in the secondhand market will obviously gravitate towards this price, as people who take part in the fundraising "flip" shares in the market, to lock in an instant profit, which can be done either by selling, or by opening a short position via a CFD/Spread Bet until the new shares are delivered.
I believe we need to lobby Government to radically reform the current system for company fund-raisings. The law needs to be changed so that a Placing is open to all shareholders (since anyone can buy the shares secondhand, why restrict who can buy newly issued shares?), and done instantly online, over say a 7-day period, with the shares being suspended whilst the Placing is undertaken. Also, instead of companies fixing the price of the Placing, it should be set by electronic auction, with firm bids submitted by existing shareholders first, and then opened up to anyone else subsequently. A minimum price could be underwritten by a third party, in return for a fee.
Going back to AGL, I am meeting the Directors today for lunch & their interim results presentation, so will report back with my impression either tomorrow or over the weekend. I've not read the accounts yet, although being a blue sky share, it's the narrative & outlook that matters more than the figures.
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