Burford Capital Announces Deeply Discounted Equity Raise
Why we think this is bad
The equity raise announced by Burford Capital is a concerning development, with the new shares being issued at a massive 98.7% discount to the previous closing price. This indicates low investor appetite for the company's shares and suggests the raise may be a last resort funding measure, potentially signaling underlying financial or operational issues. While the raise size is relatively small, the deeply discounted nature of the placement is likely to put downward pressure on the share price going forward.
Key Points
- Burford Capital announced the issuance of 139,834 new ordinary shares
- The new shares were issued at a price of 12.86 GBp per share, representing a 98.7% discount to the previous closing price of 985 GBp
- The purpose of the raise is to distribute shares to executives and employees as part of the company's deferred compensation plan
Summary
Burford Capital, the leading global finance and asset management firm, has announced the issuance of 139,834 new ordinary shares. The new shares were issued at a price of 12.86 GBp per share, representing a massive 98.7% discount to the previous closing price of 985 GBp. The purpose of the raise is to distribute the shares to executives and employees as part of the company's deferred compensation plan. While the raise size is relatively small compared to Burford's existing share capital, the deeply discounted nature of the placement is a concerning sign that is likely to put downward pressure on the share price.