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Optibiotix - PR own goal, £1 million placing but still a buy

By HotStockRockets | Saturday 6 February 2016


Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. 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.


Optibiotix (OPTI) yesterday announced that it had raised £1 million at 78p. It saw this as a triumph in that the investor is an EIS fund which approached it. So the shares will be held for three years and not flipped.

But having said it did not need any more money when doing a placing just a few weeks ago to raise £1.5 million we mug punters can feel rightly peeved at additional dilution just to suck up to an institution. It is grating. Why give an institution cheap shares? With the EIS tax breaks this fund is paying peanuts? Why not deliver more news and place at a higher price. In fact why place at all?

And it also makes one annoyed when companies say one thing and do another.

Not suprisingly the shares are off by 2p to 80p-82p on the news. This is a PR own goal. We hope that the company appreciates this. Our views on this have not been kept a secret.

Having said that, we expect very big news as soon as next week and so at up to 84p this is a buy with a view to selling at 100p plus very shortly.

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Comments

1 comments


  1. Captain Mainwaring

    Tom, on a previous OPTI tip you strongly hinted that there is a multi-national deal with P&G lined up. Do you still believe this to be the case?


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