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More on Placings – AVACTA

The ShareSoc blog provides news and informal commentary from directors, members and other contributors. Entries reflect the personal views of the authors, which do not necessarily reflect ShareSoc’s formal position. Contributors may hold shares in the companies mentioned. Nothing in this blog should be viewed as financial advice. You may submit comments on blog posts, but ShareSoc reserves the right to remove or edit inappropriate or defamatory submissions.

AVACTA (AVCT) has seen its share price rise from 100p on May 13 to 200p and then decline to 140p. I feel sorry for those investors who bought at around 200p.

The sharp decline in the share price (20p on Tuesday and 20p on Wednesday) could be evidence that this deal has leaked.

Source: Interactive Investor

The £25m placing price is 120p, so the fact that the share price is staying stable today at 140p (at 09.48 as I write) suggests, in my  opinion, there is an easy short term profit to be made here and so I have made a small opportunistic investment via my Primary Bid account.

This is the third offer I have subscribed to recently via Primary Bid and I must say that it is very easy to subscribe via their website and the subsequent mechanics are very straightforward.

Questions remain as to whether the stock was overhyped to get it to 200p and why the share price dropped so quickly. This looks like another one for the LSE and FCA to have a look at, if they wish to maintain the confidence of investors in these markets.

Cliff Weight, Director, ShareSoc

Post Date: June 4, 2020
2 Comments
  1. Cliff Weight says:
    4th June 2020 at 5:40 pm

    I made a typo in the above blog. £25m should have been £45m. The plan was to raise £45m but the demand was so high that they increased the raise to £48m. Avacta share price closed at 150p, so a nice gain (on paper) for those who were able to subscribe.

    Reply
  2. Dominic Connolly says:
    5th June 2020 at 11:48 am

    I really hope that this Primary Bid initiative becomes a game changer for the private investor and not just a short term aberration brought about by market conditions disrupting the normal capital raising options for listed companies.

    Reply

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