Late this afternoon, just as the London stock markets were closing, Vision Media Group announced that it had raised UK PDS 800,000.
There has been some lively discussion on the various investor forums and bulletin boards as to why the investment had come in at 10p a share (a premium on their current share price of circa 6p – 7p).
It’s worth taking a look at this in a bit more detail – especially before VMG announce more details on the investment (which they have promised to do on Friday 14th March).
We reckon that the investment is from an Indian investment group by the way!
As always, this is our take (and of course solely our opinion)…
VMG have received UK PDS 800K from some new investors. They (VMG) have convinced the new investors to buy in at a premium (clever if you can do it).
The new investors on the other hand are HAPPY to buy in at a premium based on what they have been told, what they have seen (the business plan perhaps, the new management team, possible sales in the offing that we don’t know about etc etc).
Industry analysts / retail investors / current shareholders see the NEW investors buying in at a PREMIUM whereas the new investors actually see themselves buying in at a DISCOUNT.
The bottom line is that whilst there is some dilution to existing shareholders because of the new issue of shares, investment of this short shows great trust and great belief in the business going forward.
We have already gone on record on the bully boards that we expect to see a large uptick in the stock come Friday.
LONDON (Thomson Financial) – Vision Media Group (Intl) PLC said it will raise about 800,000 stg via a placing to existing institutional and other shareholders at 10 pence per share.
The outdoor media contractor, previously known as Screen FX, said further details regarding the placing will be announced on March 14.
The company also said it has applied to AIM for the issue of a total of about 17.50 mln new shares at 10 pence per share, and added that the new shares will be admitted to trading on AIM on March 14.
The company said about 16.97 mln shares are being issued with regards to the deferred consideration for the completion of the acquisition of Screen Media Networks Ltd and the successful completion of the closing of the ten year Clear Channel Outdoor UK agreement.
A further 562,037 shares are being issued for the payment of fees, the company said.