Good morning!
This newsletter will focus on profit updates, M&A activity and other small business news from the previous trading day (Friday 11th July in this case). If you aren’t seeing the content you like reply to this email with what you would like us to focus on.
Here’s what happened on the Friday 11th July.
HEADLINE METRICS: 8 companies raised $27.5M+ across varied structures. Oversubscriptions dominated above $50M market cap (3:1 ratio success vs distress), while sub-$10M caps face existential funding crisis. Average discount holding steady at 15-20%, but survival mode pricing emerging at $0.001 level.
MOMENTUM PLAYS:
FireFly Metals (ASX:FFM) - $736M 282% oversubscription forcing management to double SPP from $5M to $10M. Retail appetite so voracious they fielded $28.2M in applications. +5.05% price pop confirms institutional validation. This isn't just copper-gold enthusiasm it's retail positioning ahead of underground development phase. When shareholders throw 3x more cash than requested, resource development risk is being priced out.
Nanoveu (ASX:NVU) - $52M $2M tech placement driving +9.26% with 5.93x volume spike signals institutions front-running retail on 16nm breakthrough. Sophisticated investors backing semiconductor play while broader tech sector bleeds. Classic early-stage institutional accumulation pattern—they're not buying the current revenue, they're buying the patent moat.
Mithril Silver & Gold (ASX:MTH) - $64M C$11.5M placement to "Australian, North American, and overseas institutional investors" with +4.76% reaction. Cross-border institutional appetite for Mexico exposure suggests commodity positioning beyond domestic mining plays. Using full ASX placement capacity indicates confidence in drill results pipeline.
DISTRESS SIGNALS:
TALi Digital (ASX:TD1) - $4.2M Entitlement offer carnage: 80.6% shortfall at $0.001 pricing. When shareholders won't pay a tenth of a cent, the business model is fundamentally broken. $131K raised from $677K target represents complete retail capitulation. Survival mode pricing can't fix strategic irrelevance.
Surefire Resources (ASX:SRN) - $6.5M Rights issue producing $2.7M shortfall (67%) despite $0.002 pricing. Even resource-hungry retail won't back this story. Sanlam placement commitment suggests institutional rescue, but 8.73x volume spike on flat pricing indicates distressed distribution.
MARKET PATTERNS:
Clear market cap stratification emerging. Above $50M: institutional backing drives oversubscriptions and positive price action. Below $10M: retail fleeing creates chronic underfunding. The $0.001 price point has become the new survival threshold companies pricing below this face delisting mathematics.
Tech placements outperforming resource raises on day-of-announcement metrics (+9.26% vs +5.05% average), but resource sector showing superior retail commitment (282% oversubscription vs institutional-only tech demand).
Converting notes structure (Spacetalk) gaining traction as alternative to equity dilution, particularly for growth capital with debt reduction components. Market punishment swift for guidance downgrades—JAT's -11.27% reaction to $39M revenue contraction shows zero tolerance for operational missteps.
Institutional appetite remains sector-agnostic but size-selective. Retail showing binary behavior: all-in on quality stories, complete abandonment of distressed situations.
See you all tomorrow!