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Photonstar LED – thanks Nigel & a few more things…

By Steve Moore | Thursday 4 May 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

Nigel Somerville commented earlier on how for those suckered in by the Photonstar LED (PSL) ramparoonie, it’s now mega-dilution ahoy (monster-discount placing shares representing a 19.8% increase in the issued share capital). I thank Nigel for the kind words – and make a further few points…

Firstly, natch those suckered in don’t include CEO James McKenzie, CTO Majd Zoorob and investment management group Walker Crips - who are instead tucking into discounted placing shares to the tune of more than £28,500, £12,000 and more than £205,000 respectively. For them lovely jubbly and, from them, a big ‘screw you’ to those who recently bought into what the company describes as its “well received by the market” recent announcement.

It laughingly tries to justify the placing as “representing a 64.7% premium to the company's average 30 day closing price since 3 April 2017”. Er, what about the more than 56% discount to the stated prior day closing price?!? I wonder why the attempted ‘no-one watching o’clock’ (5:24pm) announcement!

Indeed, it would seem the piss is only not being taken further because “the number of placing shares being issued fully utilises the company's existing authorities for the disapplication of pre-emption rights for a cash placing”, though McKenzie does get in “we are very grateful for the continuing support”. I bet he is!

The announcement also notes “challenging trading conditions… continued during the first quarter of 2017”, but “following the company's participation at the IBM InterConnect 2017 Conference in March, management have felt more confident about the company's prospects for 2017 and beyond”. Hmmm, we’ll see how that turns out but the track-record suggests the new cash won’t last particularly long and I’ll continue to avoid.

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