Likely related to new shares issued - so if you add more shares, the price per share will fall. That's my guess. I believe they had announced a significant secondary share offering last week...

It is because if you have a stock, you can buy 2 for 5DKK each.

But only if you bought the yesterday or earlier.

If you buy one today, you will not get the option of the two, and therefore the value is 66% lower then yesterday, as there is now 3x as many stocks if everyone buys their new stocks at 5dkk.

In reality the stock have increased a good portion, and it seem to be a positive trend in the stock.

And the new stocks are indeed the new funding which went through.

Partly the dilution effect, but probably more important was that the share offering was at a massive discount - Bloomberg quoting a 60% discount once adjustments made for enlarged capital base.

Onerous terms as they say.

Makes sense now. Had me worried!

There is cause for worry - they were able to raise new funding, but at very tough terms.

Again, the lower star price reflects the large discount B&O had to offer to raise new money.

9 LEE wrote:

Makes sense now. Had me worried!

Sandyb wrote:

There is cause for worry - they were able to raise new funding, but at very tough terms.

Again, the lower star price reflects the large discount B&O had to offer to raise new money.

 

9 LEE wrote:

Makes sense now. Had me worried!

 

Please correct me if I got this wrong but didn't B&O basically release its held-shares to the market, thereby actually gaining operating cash? If that is the case the only down side would be that a lot of those shares were buyback at a higher price, so the return on "capital" wasn't so good, but that's better than no cash at all?

I don't think it bad for B&O. Shareholders will wear the results, either way. 

poodleboy wrote:

Sandyb wrote:

There is cause for worry - they were able to raise new funding, but at very tough terms.

Again, the lower star price reflects the large discount B&O had to offer to raise new money.

 

9 LEE wrote:

Makes sense now. Had me worried!

 

Please correct me if I got this wrong but didn't B&O basically release its held-shares to the market, thereby actually gaining operating cash? If that is the case the only down side would be that a lot of those shares were buyback at a higher price, so the return on "capital" wasn't so good, but that's better than no cash at all?

I don't think it bad for B&O. Shareholders will wear the results, either way. 

I dont see the big downside for me as an investor,

The money I will have to pay so I get 3x amount of stock, will give me the same % of the company that I have now. But the company now have 400mio xtra cash, which I myself was a part of putting in.

And right now if I could sell my 3x stock to the current price, than yesterdays price for 1x, I would gain much more. So right now it is very good. But the stock market is always a gamble.

Overall all B&O did, from what I can tell was to dilute existing shareholders but offered them the right to buy additional shares at a discount. The new shares I believe were all sold. Also, this is better than borrowing money with. the option of allowing the borrower to convert them into shares at some future market price. Those are toxic raises. This one by B&O here seems to be fine. What we will watch for is how the money is deployed by the company