Escrow Watch: Nearly half a billion shares being released as Australia gets back from holidays
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Escrow refers to shares that are held by early investors or directors restricted from selling for a year or two. The release of escrowed shares can have a big impact on a stock price, because a sudden influx of stock onto the market can depress the shares you own.
And the thing about escrowed shares, and the companies releasing them, is that they don’t take holidays. There are 476 million shares coming out of escrow from 15 companies between now and the end of the month, as just about everyone gets back to work.
Davenport Resources (ASX:DAV) has the highest proportion of its issued capital coming out of escrow, with almost exactly half, or 71.8 million shares, being released on January 20.
Lifespot Health (ASX:LSH) has 37 per cent of its shares coming out of escrow on Friday, with 28.3 million being released.
Over at Freehill Mining (ASX:FHS), a whopping 204 million shares are being released from escrow on January 18. They’ve been held since the company’s listing in January 2017 by “persons who received shares under the conversion offer at the time of the company’s IPO”.
Freehill’s prospectus detailed shares being given to lenders who gave the company funding ahead of its IPO.
“The loan funds advanced by lenders were advanced over a period from March 2015 to October 2016 to provide working capital to the company,” it said at the time. “The lenders are numerous individual sophisticated and professional.”
Murray Cod Australia (ASX:MCA) has 21 per cent of its shares being released from escrow, with 81.3 million coming out on January 31.
Also due to be released are 64 million options exercisable at 7.5c a share, if the company manages to produce and sell 100 tonnes of Murray Cod by January 31 2021.
Kalamazoo Resources (ASX:KZR) and Blackstone Minerals (ASX:BSX) also have significant portions of shares coming out of escrow, 26pc and 20pc respectively.
Ten million Covata (ASX:CVT) shares originally issued to the vendors of CipherPoint Software as part of Covata’s acquisition of CipherPoint are being released on January 31.
Here’s a list of ASX stocks that have signalled escrow releases before the end of this month:
Scroll or swipe to full reveal table. Click headings to sort
|ASX code||Company||Date released||Escrowed shares||% of all shares|
|MCA||Murray Cod Australia||31-Jan||81,285,715||21%|
|BC8||Black Cat Syndicate||17-Jan||1,000,000||2%|