>>With the number of private placements, underwritings and IPO's being cancelled in the past 6 weeks it is a big vote of confidence, in my opinion, to see the institutions and insiders putting their own money on the line and closing the large majority of the Pre-IPO private placement.<<
Hi Keith,
Just some thoughts on CPT not closing the entire private placement that they had initially announced. I know some people have asked why this would have happened. In response to anyone wondering this, I want to mention that the reality is that any financing commitments from groups or individuals are only as firm as when the cheque actually arrives and is in a company's bank account.
I am sure that when the market corrected, the people who sent letters of intent have re-thunk their involvement in all their holdings and some decided to back off and not forward their cheques. So what does Mr. Chu do about this? Some might say, take a stand and force these people to honour their letter. I personally believe that that would be a very foolish thing to do. These same people may see their situations change, and they could become extremely strong supporters in the future.
When the company puts out the Press Release, should they let the focus be on the minority of those who did not make good on their letters - or should they let it slide and focus on the positives of what they have accomplished? I vote for focusing on the positive. And make no mistake, in my books receiving US $7.5 in this market is extremely positive. Given the fact that when you look around at other companies who have had their financings eviscerated or and cancelled I really don't think that he should be taken to task for pulling off this level of support.
On the flip side, consider the reaction if Mr. Chu had waited till the full amount that was initially committed had come in. Or if he had waited to find other investors to take up the difference. I believe that this delay and lack of news would have created a heightened concern amongst investors. Also, this closed financing seems to be the impetus for him to take SEG to their IPO listing in Hong Kong and I would rather have this proceeding than sitting waiting for the money to trickle in. I also feel that it is very encouraging that it seems that their money flow has not dried up. The additional letters of interest from Europe and Asia is nice to see as well. Now if they can close on these, and put the cheques in the bank, then this company will be in tremendous shape going forward.
Crazy Canuck |
