The past fortnight's capital raising produced a sharp split between the brokers who sold the stock and the investors who bought it. Eight of the ten deals examined were trading below their issue prices by 10am Friday Perth time, while the broking firms involved took home substantial fees and options on both winners and losers.
Argonaut Securities sat at the top of the tree, joining Barrenjoey Markets as joint lead manager on Wiluna Mining's $180 million float and then teaming up with Canaccord Genuity on Ballard Mining's $45 million placement, leaving its fingerprints on $225 million of gold sector fundraising. CommSec appeared on both tickets.
Wiluna's return proved the most painful for subscribers. Priced at 65 cents, the stock closed its first session at 56 cents and slid to 50.5 cents in Friday morning trading, a 22.3 per cent loss against issue. The company budgeted $8.5 million in joint lead-manager fees including third-party advisers, plus 5.24 million three-year broker options exercisable at 84.5 cents, far out of the money at the current price.
Ballard Mining's $45 million placement at 66 cents, a 7.7 per cent discount, had slipped to 60.5 cents. The proceeds are slated for its Mt Ida gold project in Western Australia, with a share purchase plan targeting a further $5 million and potential oversubscriptions that could push its bank balance toward an estimated $94.1 million. Torque Metals, which raised $25 million at 19 cents to fund its Ritz project southeast of Kalgoorlie, traded at 16.5 cents, leaving subscribers 13.2 per cent underwater.
Two deals bucked the trend. Amaero International raised US$20 million (A$28.7 million) on Wall Street at US$4.25 per share, equivalent to 15.22 cents per ASX CDI, and traded at 19 cents on Friday, a 24.8 per cent gain. Baird and Lake Street Capital Markets collected US$1.4 million in underwriting commissions, seven per cent of gross proceeds, plus a 30-day option over a further 705,882 shares.
Identifai Genetics, a $10 million IPO at 20 cents led by Aesir Corporate, traded at 49 cents, putting subscribers 145 per cent ahead. The broker's package drew particular attention: a six per cent cash fee worth $600,000, plus 10.15 million April 2029 options exercisable at 25 cents and valued at $899,000, a combination approaching 15 per cent of proceeds.
Maronan Metals' $20 million placement at 40 cents remains conditional on shareholder approval on November 4. The stock traded at 38.5 cents, 3.8 per cent below the proposed issue price, leaving the deal's fate uncertain. Other brokers active in the fortnight included Euroz Hartleys, Morgans, Taylor Collison, GBA Capital, Veritas Securities, Prenzler Group and Ord Minnett.