As opposed to many expectations based on the common practice that on public offering news the share price of a stock soars, yesterday Magindustries Corp. (TSE:MAA, MAA message board), (PINK:MAAFF ) stock followed the slogan of the company and met the demand, "from the Ground up".
MAA stock entered the trading session 12.68% lower than the previous session close and closed the market with the minor 0.045% price decline.
The giant doji of investor uncertainty towards the share price direction and the almost four times higher volume traded were in unison not only with the temporary trading halt of the shares.
Looks like investors' desire was to equalize the share price with the one proposed in the prospectus for the public offering.
Yesterday, the company's amended and restated preliminary short form prospectus was filed with SEDAR. It is offering up to 33,400,000 common shares of MagIndustries Corp. at a price of $0.30 per offered share.
According to the prospectus, after deducting the underwriters' fee and the expenses of the offering, the estimated net proceeds from the offering are approximately $9.07 million. As stated there, "these funds will be combined with the company's working capital of approximately $10.0 million (as at October 31, 2010) for a total of approximately $19.1 million in available funds upon completion of the offering".
Magindustries Corp. plans to use the net proceeds for general corporate purposes, on-going project development activities and working capital requirements.
After the furious October for the investors of the good performing MAA, yesterday the status quo of the met demand "from the Ground up" was returned. In a day, the huge portion of the accumulated for more than a month value of MAA stock was lost.
honeywood
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