@madamswer Yes you are spot on, how the share price reacts and...

@madamswer


Yes you are spot on, how the share price reacts and performs is very much a reflection of the company and the reason it puts forth for the renounceable rights issue.

Most of the companies (if not all) you invest in and are referring to are profitable and generating solid cash flow ... a fully renounceable rights issue would present little risk of not being successful for them if they price and message it appropriately.

But for a company that is not worth their salt ... would you be confident it would hold its TERP for a few weeks? And would an underwriter take on such a risk? How practical is it for Mesoblast to go down this path, especially after having tapped holders for $1.40 a few months go?

As a shareholder I believe a fully renounceable rights issue would have been a mistake and would have sent the share price straight down to TERP and having people open their wallets again to increase their stake and the volatility of global markets would have seen the share price trading below TERP a very real possibility. I dare you to say it wouldn't in MSB's case.

They went with debt, and I as a shareholder am happy with that. The company will be taking what will be its first FDA approved product to market itself, and that makes me a very happy shareholder.