Currently, a trend among small- and microcap companies involves raising modest amounts of capital by selling shares at significantly reduced prices.
To attract risk-averse investors, discounts of up to 50% have become common, with some companies, like one struggling AIM-listed firm, having to drop their stock value by over 80% to secure new funds.
In this context, the market was surprised by Redx Pharma’s recent investment round, which maintained its share price at 26p. What was remarkable was that the company managed to raise over £14 million, a substantial amount compared to its market capitalization, without offering a significant discount.
This newly acquired capital will be invested in Redx Pharma’s portfolio of clinical and pre-clinical assets, which hold the potential for groundbreaking advancements in fibrosis and cancer treatment.
Turning to the broader market, it has been a challenging week for the AIM All Share index, which lost 1.8% of its value, falling to 683.77, as many investors remained on the sidelines.
This downturn was reminiscent of the FTSE 100’s performance, which also faced political uncertainty due to the Israel-Hamas conflict.
In the world of journalism, we often encounter stories that defy conventional wisdom or logic. These stories are known as ‘man-bites-dog’ stories. Sosandar (AIM: SOS) provided such a story this week. Despite its success as an online fashion retailer, the company surprised the market by announcing its intention to open physical stores. The market’s reaction was far from positive, with Sosandar’s shares plummeting by 40% to 11p.
Revolution Bars Group described the late-night market as “very challenging” in its latest results announcement. The owners of popular chains like ‘Revs,’ Revolución de Cuba, and Peach Pubs reported an operating loss, citing a tough start to the new financial year.
The deal of the week goes to Jason Tebb and his team at OnTheMarket, who successfully brokered the £99 million sale of the online estate agency to US real estate information specialist, CoStar. This exit provided an elegant outcome for investors, valuing their shares at 110p each, a 56% premium to the pre-bid price. However, this news shook up Rightmove, as it now faces a formidable rival in the property listings sector.
Continuing with the theme of deals, Gama Aviation (LSE: GMAA) saw its shares surge by 63% after announcing the sale of its maintenance and repair subsidiary, Jet East. Net proceeds from the sale are expected to be around £83 million, promising a substantial return to investors, likely ‘not less than’ 55p per share.
As the price of gold hovered around $2,000 an ounce, maintaining its status as a safe-haven asset during times of turmoil, investors explored various ways to profit from the precious metal’s price. This led to increased interest in junior mining companies, prospectors, and mine developers. Wishbone Gold saw a notable gain of 26% at 2.36p. The company’s recent updates have been positive, including the completion of reverse circulation drilling at its Red Setter project and plans to commence diamond drilling at its Cottesloe project in the Pilbara region.
In the healthcare sector, Ondine Biomedical had an exceptional week, with its shares surging by 28% to 10p. Ondine has introduced a potential revolution in post-operative infection prevention through its patented photo disinfection process, which involves a light-activated nasal gel. Recent research indicates that its Steriwave technology can eliminate over 99.9% of antibiotic-resistant bacteria, a significant development in combating antimicrobial resistance, a pressing public health concern responsible for 33,000 deaths annually in Europe alone.
Lastly, October brought a couple of listings that may have gone unnoticed. Substrate AI made its official debut on the Aquis’ AQSE Growth Market, entering the AI sector with a unique biologically inspired learning technology developed by co-founder and chief technology officer Bren Worth. Simultaneously, SSV Capital joined the JP Jenkins matched bargain platform, focusing on disruptive technologies, particularly in fintech and ‘proptech’.
