Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Mirada Placing - Buy but we are angry

By HotStockRockets

8 July 2014 09:49

More:

Mirada (MIRA) has announced 28 million new shares have been conditionally placed at 12.5p each to raise a gross £3.5 million (net £3.3 million). We are angry about certain matters but the shares are cheap.

Already a member? Sign in

• All premium articles

• Tom Winnifrith’s Bearcast

• Access to all the entire nearly 13 year archive

• ShareProphets Daily Newsletter

Cancel any time

This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.

Comments

Patrick Leahy

8 July 2014, 13:40

Thanks for posting an update, appreciate your opinion on Mirada. I was slightly less positive about the 11% of investors who want out (which for me was the bigger story as the company appear to need extra money from the equity given balance sheet). Perhaps they are cashing in on a decent rise in the share price and potentially when we might not see much of a change in Mirada’s balance sheet for another 12 months but it’s not a great sign of their confidence. My other concern is about the number of shares in issue which is now quite high for a company with this size a market cap. Nevertheless I remain a holder for the reasons you set out and because I think the share price probably undervalues the company based on my forward P/E guesstimates for the next 18-24 months.
Paul Scott

8 July 2014, 14:14

Whilst I agree with you that the share price fall was suspicious – obviously people “in the know” were selling from 15p down to 12.5p whilst the Placing was being arranged.

However, that doesn’t really matter if existing shareholders have the opportunity to buy in the open market at about the same price, which we do.

I topped up my holding at 12.8p yesterday afternoon, so it doesn’t matter that a Placing occurred at 12.5p, since my buy price is near enough to make no difference.

This was the conclusion I came to on my new site, www.PlacingWatch.co.uk where I wrote an article about Mirada yesterday (I hope it’s OK to mention it here?)

Given that they were not really in a position of strength (running out of cash due to delays on a big contact) it could have been a lot worse, with a potentially much deeper discount.

Regards, Paul.