These rights issues are a mix of psychology and mathematics. Mathematically, one could argue, as already warned in the thread, that if the offering results in 1.5 billion additional shares to raise 15 million, that is 1 cent per share. Often, the stock price also drops to that mathematical level. This happened with Faron, for example: first a 68% drop in 2 days, and then the rest down to the mathematical offering price within a week. It even went below that. There, however, it was “only” 40 million new shares. But now, we are talking about Bioretec.
However, the offering does not exist yet, nor do its terms. Analysts can only change their targets once it is known what has been agreed to happen. The shareholders, i.e., the General Meeting, will decide on the possible offering on March 27, 2026. Psychology can support the share price above the mathematics. The most important thing, of course, is to secure funding for as long as possible. And if the company becomes dirt cheap, will someone just snap it up? That reasoning could support the share price.
As a disclaimer: I had half of a tracking position in Bioretec. I knew, of course, that there would be offerings, but the potential 1.5 billion new shares spooked me. A low subscription price doesn’t really matter if you subscribe to everything you are entitled to, but a potentially low price forces you to subscribe to everything unless you want to lose a large portion of potential future returns as an owner. Retail investors are being shaken up. I will likely be back on board at some point. I am deep in another rights issue right now…
In my opinion, Bioretec has good products and I want to see the Finns succeed. If follow-up surgery to remove the fixation can be avoided in some fracture fixation procedures, it’s a no-brainer. It should be noted, however, that orthopedists like their work, i.e., surgeries. Healthcare organizers/payers/resource managers, on the other hand, would love to eliminate removal surgeries. Both need to be targeted in marketing.
