Tecnotree rights offering oversubscribed

Tecnotree (OMXH: TEM1V) said that preliminary results of the rights offering ended on June 19th show that approximately 49.9 million shares representing 101% of the 48.9 million shares offered were subscribed to. Many of the subscriptions were allotted to those oversubscribing, meaning plenty of investors simply lost a portion of their investment after their subscription rights were left unused and unsold. The results shows 64.1% of offered shares were subscribed using subscriptions rights and 35.9% without them. The subscriptions rights were trading very near zero in the final days of trading so there wasn’t much of a chance for many, particularly since Tecnotree’s ownership is relatively evenly spread out to mainly small Finnish retail investors.

Tecnotree has been saying the main reason for the issue is to raise working capital in order to work through the current record-high order book. While it is true that Tecnotree now has a lot of orders in its books following a strategic shift in the product mix, it needs to show it is able to make a profit out of those, something that has been lacking recently, or face another cash constraint soon enough. The proceeds are above the 5 million threshold, which should allow the company to receive a 5 million credit limit. The company has been using social media to affect markets as well, as evidenced by a tweet suggesting operators are spending a lot. An arbitrage opportunity has been available in the last few days since the newly subscribed shares have been trading under their own ticker, with a discount, before the combination of the two series of shares is expected on the 29th.