Originally Posted by
McGinty
IMHO the reason for lack of wealth creation is the continued dilution of shares, of which there are two consequences for us retail shareholders.
The first is straight forward,
In July 2016 after the Buy Right Cars acquisition there were 64m shares on issue, since then
Sep 2016 - Convertible Bonds issue and Share Placement of 10.479m shares @ $2.945
Sep 2017 - Share Placement and Share Purchase Plan of 9.934m shares @ $3.02
Sep 2018 - Convertible Bond issue of (est) 4.526 shares @ $2.85 (down round?)
Total of 24.939m additional shares or 39% increase on July 2016 (26 months)
The second consequence is that the big money has the power to push the share price to suit their desired outcome.
In 2017 the price was consistently sold down the 2 months before the before the $25m placement was announced (2 months after the Hugh Green sell down), the result of this was a discounted capital raising 16% below where the price was early July. Then adding insult to injury the SPP was poorly conducted and a lot of retail investors didn't get a fair chunk of the offer.
The same thing is currently happening with the price now being pushed back 9.5% from early July for what I can only assume is for the current bond holders to get a more favorable conversion price.
It's been a long hard road being a TRA retail shareholder and I only recently decided to get over the 2017 SPP incident and join the register again. I personally think that management are doing a great job running the business side of things, but the board could have done better with the company. IMO The board doesn't seem to understand how the equity market works, which has helped contribute to the lackluster 3% p.a shareholder returns over the last 2 years.
I will not be voting in favour of rewarding the governors of our company for achieving lackluster returns!