Good morning!

I had a few technical problems yesterday morning, and then fell asleep in the afternoon, so finished off yesterday's report in the evening. So if you want to see the completed article, then click here.

MyCelx Technologies (LON:MYX)

Shareholders here must be livid, as the company has this morning announced a Placing at 150p, or a 21% discount to last night's close of 190p per the company. It looks as if existing holders will not have an opportunity to participate, as I don't see any mention of an Open Offer.

I really must get around to updating my PlacingWatch website in the new year, as the issue of giving away a big discount to placees, whilst existing holders are shut out, is outrageous. Apparently companies can do an Open Offer very easily & cheaply, if it's less than £5m, so I've been told. It only becomes onerous in terms of cost above that level, due to some EU regulation. Something along those lines anyway.

As I always say, the best way to avoid being stuffed by repeated discounted Placings is just not to buy shares in companies that need to raise any money! Also, if management hold a decent slice of the equity (over 10%-ish) then they tend to think much more like long-term owners, rather than hired hands keen on empire building. So interests aligned & all that.


Fitbug Holdings (LON:FITB)

The above observations bring me nicely onto this little speculation!

As reported here in my report of 28 Oct 2014, the Balance Sheet at Fitbug was clearly insolvent, so I called it a "racing certainty" that a Placing would be done. It has of course, as was announced yesterday, for £3.5m before expenses being raised with new shares issued at 9p.

So as you can see from the three month chart, this has been a share for crazy speculators only, not investors. It just isn't worth getting involved in this type of thing, unless you are honest with yourself and appreciate that you're just gambling.

With this type of micro cap, the share price will nearly always fall in the month or so whilst a Placing is being set up - as a good bit of insider dealing goes on from people who know about the Placing, locking in their ill-gotten gains onto unsuspecting mugs…

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