AML - Stock Market Listing
Discussion
Can this really be true ?
Having raised half a billion Pounds, just a few months ago, the answer to Aston Martin's difficulties, is to raise more capital and ask for more debt.
https://news.google.com/articles/CBMiSGh0dHBzOi8vd...
'The Retail Offer will be open to retail investors with immediate effect following release of this Announcement. ...... preference will be given to the Company's employees and existing investors .....
Edited by Jon39 on Friday 26th June 09:09
Jon39 said:
Can this really be true ?
investing.com said:
Aston Martin (LON:AML) stock fell over 11% after the luxury carmaker said it would issue new shares worth up to 20% of its existing equity capital to ride out the coronavirus crisis.
silentbrown said:
Jon39 said:
Can this really be true ?
investing.com said:
Aston Martin (LON:AML) stock fell over 11% after the luxury carmaker said it would issue new shares worth up to 20% of its existing equity capital to ride out the coronavirus crisis.
Well this is an interesting one!
at first sight it's - Thanks very much for diluting our shareholding by 20%.
On the other hand it is better for the company to get money this way than trying to borrow more so improves the company's finances a lot.
What is unusual is that it was not an equity rights issue to existing shareholders. We are NOT being offered the right to buy the new shares but instead are just placing all but £8m worth with Institutions and Stroll / Investindustrial consortiums etc
They offered only £8m to the public or private investors and you had to register for those and the subscription was filled and closed at 9.55am .
What is also unusual is that these commitments to buy have taken place without knowing the price! - that is being announced by Tuesday and then they take the money from your account the next day I think
Buyers are assuming that there will be a good discount and so they have committed.
But the price might only be a 10% discount on the closing price yesterday - which was 62.4
So offer at 56p ?
ie. no discount on the current price at 11am today.
Doing it this way is quicker for the company and less costly but maybe it also means the company gets the money without shafting the private investor twice - once with the 20% share dilution and then by lowering the SP again to 50p or worse ?
This way the company has got the big funds to commit to buying the new shares without knowing the price.
If it is at least 55p then there will be no selling or profit taking when the new shares are issued unlike last time when they were only 30p so millions were sold driving the price down for a month.
If of course the price does turn out to be 50p or lower then yes we've been shafted twice because we didn't get the right to buy the cheap shares
Well that's my thoughts anyway.....
The rollercoaster continues!
(at least they announced DBX has been signed off and full production has begun
)
at first sight it's - Thanks very much for diluting our shareholding by 20%.
On the other hand it is better for the company to get money this way than trying to borrow more so improves the company's finances a lot.
What is unusual is that it was not an equity rights issue to existing shareholders. We are NOT being offered the right to buy the new shares but instead are just placing all but £8m worth with Institutions and Stroll / Investindustrial consortiums etc
They offered only £8m to the public or private investors and you had to register for those and the subscription was filled and closed at 9.55am .
What is also unusual is that these commitments to buy have taken place without knowing the price! - that is being announced by Tuesday and then they take the money from your account the next day I think
Buyers are assuming that there will be a good discount and so they have committed.
But the price might only be a 10% discount on the closing price yesterday - which was 62.4
So offer at 56p ?
ie. no discount on the current price at 11am today.
Doing it this way is quicker for the company and less costly but maybe it also means the company gets the money without shafting the private investor twice - once with the 20% share dilution and then by lowering the SP again to 50p or worse ?
This way the company has got the big funds to commit to buying the new shares without knowing the price.
If it is at least 55p then there will be no selling or profit taking when the new shares are issued unlike last time when they were only 30p so millions were sold driving the price down for a month.
If of course the price does turn out to be 50p or lower then yes we've been shafted twice because we didn't get the right to buy the cheap shares
Well that's my thoughts anyway.....
The rollercoaster continues!
(at least they announced DBX has been signed off and full production has begun
)Edited by GPH on Friday 26th June 11:15
Edited by GPH on Friday 26th June 11:27
Edited by GPH on Friday 26th June 12:21
Lots of Covid-hit companies have been raising capital via share issues and convertible bonds. US airlines and cruise lines have been at the forefront. They have been trying to buy themselves enough 'runway' (no pun intended) to get to the other side of the crisis. Those issues have tended to do well as the accumulation of cash reserves solves one of the market's key concerns about the medium-term viability of the airline. Therefore the sshare goes back up.
Aston Martin has some big issues on the debt side so I'm not sure how much runway this gives them.
Aston Martin has some big issues on the debt side so I'm not sure how much runway this gives them.
silentbrown said:
Seems to be share price has taken a hammering this morning, too.
Company to have more shares in issue, so each one is worth less.
Slightly more complicated than that, because the Company will have extra cash in the business.
Judging by the frequent fund raising (is this the fourth time since last autumn), AML don't appear to keep the new cash for very long.
GPH said:
Well this is an interesting one!
at first sight it's - Thanks very much for diluting our shareholding by 20%.
On the other hand it is better for the company to get money this way than trying to borrow more so improves the company's finances a lot.
at first sight it's - Thanks very much for diluting our shareholding by 20%.
On the other hand it is better for the company to get money this way than trying to borrow more so improves the company's finances a lot.
I thought there is borrowing, as well as the equity increase.
I was puzzled though because reading briefly, they stated 'draw down the additional', which I thought must be the option (offered with last years bond provided they exceeded 1400 DBX orders) at 15%. They are now saying 12% (interest half cash and half PIK), so has there been a negotiated lower rate?
Hope there cannot be any possible connection, between AML raising extra money and .....
https://the-race.com/formula-1/aston-martin-f1-tea...
Price just announced at 50p.
They claim its only an 8% discount which is rubbish as it has been trading an average above 55 this morning .
Mind you it does mean if you didn't subscribe to the small £8m public issue you haven't missed anything because the share price has instantly dropped to 50p and less so in fact no one who is getting these new shares will make an instant profit like they could with the 30p issue as I thought.
So for once all the big funds and institutions that have just handed over a couple of hundred million got no advantage as you can buy the shares for 50p right now.
They claim its only an 8% discount which is rubbish as it has been trading an average above 55 this morning .
Mind you it does mean if you didn't subscribe to the small £8m public issue you haven't missed anything because the share price has instantly dropped to 50p and less so in fact no one who is getting these new shares will make an instant profit like they could with the 30p issue as I thought.
So for once all the big funds and institutions that have just handed over a couple of hundred million got no advantage as you can buy the shares for 50p right now.
Edited by GPH on Friday 26th June 12:51
GPH said:
ha ha. No thank God. that was announced weeks ago
I look forward to the day AML has £200m to invest in an F1 team!!!
that is many years away.
I look forward to the day AML has £200m to invest in an F1 team!!!
that is many years away.
Yes, I know Racing Point made their announcement weeks ago, but AML will now have money.
Only me being suspicious, so we can forget any connection.
Jon39 said:
GPH said:
ha ha. No thank God. that was announced weeks ago
I look forward to the day AML has £200m to invest in an F1 team!!!
that is many years away.
I look forward to the day AML has £200m to invest in an F1 team!!!
that is many years away.
Yes, I know Racing Point made their announcement weeks ago, but AML will now have money.
Only me being suspicious, so we can forget any connection.
GPH said:
The Villagers will advance on Gaydon with pitchforks, if Stroll sends one penny to his F1 team before the Billlion debt is paid off!
Thank you Graeme, very reassuring.
And it was only yesterday, that I discovered a financial connection between AML and a 'gentleman' named Robert Maxwell !
Well I may be reading this all incorrectly as my background is not in equities, but it does feel to me like AML seem to have very little regard for their retail shareholders at the moment. I understand that we are living in very difficult times, and that cash flow has been, and continues to be, a very big problem in the short term. The share price has dropped 30% this week. I may be a cynic, but it seems to me that a big part of that drop is due to this capital raise that many seem to have been unaware of. The amount raised looks less than the reduction in market cap this week, and it seems that once again, desperate times warrant desperate measures. Surely there is a limit to how often they can do this before shareholder confidence completely evaporates?
Best Regards
Minglar
Best Regards
Minglar
I'm thinking the opposite - other than I would rather not have had the 20% dilution thank you and resulting 20% drop in share price...... but I actually think they protected the individual shareholder
But with regards to this latest issue if they had done a normal equity issue we would have all felt obliged to put in more money to keep our % of the company but in fact they only allowed £8m of the £150 million to come from the public.
Look at it this way. Stroll made himself and his consortium members put in more money (they took 25% to maintain their position) and he made InvestIndustrial/Prestige put in 8% (which explains why they reduced their holding from 19.9 to 10.9% in the last couple of weeks because they knew they were going to have put their hands in their pockets)
The rest he got from the big boy funds who have not made a penny profit because you could buy the share for 50p on the open market this morning.
So if the most sensible way to get cheap money was through an equity issue then actually I think they did well not letting the individual shareholders get too involved in this.
The 2 biggest shareholder groups have just put another £50million in which at least means they are backing it with their own money.
The market seems to be viewing it positively at the moment as the price has gone up 7% from 49p at 12.45 to 53p now?
But with regards to this latest issue if they had done a normal equity issue we would have all felt obliged to put in more money to keep our % of the company but in fact they only allowed £8m of the £150 million to come from the public.
Look at it this way. Stroll made himself and his consortium members put in more money (they took 25% to maintain their position) and he made InvestIndustrial/Prestige put in 8% (which explains why they reduced their holding from 19.9 to 10.9% in the last couple of weeks because they knew they were going to have put their hands in their pockets)
The rest he got from the big boy funds who have not made a penny profit because you could buy the share for 50p on the open market this morning.
So if the most sensible way to get cheap money was through an equity issue then actually I think they did well not letting the individual shareholders get too involved in this.
The 2 biggest shareholder groups have just put another £50million in which at least means they are backing it with their own money.
The market seems to be viewing it positively at the moment as the price has gone up 7% from 49p at 12.45 to 53p now?
Edited by GPH on Friday 26th June 14:52
Minglar said:
...... it seems to me that a big part of that drop is due to this capital raise, that many seem to have been unaware of.
Yes, a sequence of money raising occasions during the past year, and obviously not all to do with COVID-19.
Quite normal for corporate actions of this type to be kept secret from almost everyone, because of course the announcement itself moves the share price. Those who do know are legally barred from any dealings etc. Just bad luck on short-term traders, who might have bought recently with borrowed money.
Hopefully the imminent DBX deliveries, can help to reverse the Company's cash outflow pattern of the past few years.
GPH said:
..... (which explains why they reduced their holding from 19.9 to 10.9% in the last couple of weeks, because they knew they were going to have put their hands in their pockets).
Is that insider dealing?
Possibly could be construed as acting on price sensitive information, before it was released to the market.
Thanks for the explanation guys. I guess it’s thoughtful that they only offered the deal to a small group of retail investors, in regards to the proportion of the overall raise that was available to the public sector. However, I am not sure I agree that the “big boy funds” have not profited from this weeks move. Hedge Funds are notorious for shorting stocks, although perhaps they represent a different type of investor to those who ultimately have invested this time. I think perhaps the biggest question over all of this should be, what has AML been spending all the money on since the last cash injection? If it’s just day to day running costs and employee salaries, there could be even more trouble of the horizon. Better minds than mine will know the answers.
Best Regards
Minglar
Best Regards
Minglar
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