As a retail shareholder of Rightcrowd (ASX: RCW), I felt rather disappointed when they announced their private placement capital raising at 33 cents per share. You see, I have already paid up to accumulate some Rightcrowd shares at above 40 cents, and I was keen to buy on share price weakness. I would have loved to buy shares at 33 cents in a share purchase plan (SPP), but to my dismay, the company did not include a share purchase plan. My current understanding, based on my correspondence with the CEO, is that an SPP is unlikely to occur.
It seems the decision not to proceed with an SPP was influenced by a view that to do so would hamper the company’s ability to raise capital from institutions at 33 cents. However, I believe that the decision was also impacted by a lack of two way communication between retail shareholders and the company. In the right circumstances, retail investors can be a good source of new capital for small listed companies, but only if company leaders are aware of that potential.
By cultivating a strong relationship with retail shareholders, Rightcrowd could increase its capital raising options in the future, benefitting all shareholders. I believe if retail investors let the CEO know that they would be keen in participating in discounted capital raisings, then the company would be more likely to allow equal access to discounted capital raisings, in the future. In any event, I believe retail investors need to speak up, if only to remind management that we are here, and we would like discounted shares too.
Therefore, I encourage Rightcrowd shareholders to email the CEO at [email protected], to let him know we appreciate all his hard work, and, politely, to request he consider giving greater priority to providing equal access to discounted capital raisings for all shareholders.
This article documents some of the factors influencing a company’s share price, but the article is not intended financial advice, it is general in nature, and our disclaimer is here. Claude owns shares in RCW.