Escrow Watch: Over 430 million shares in escrow are set for release before Christmas
Link copied to
In December, over 20 ASX companies are releasing just over 430 million escrowed shares, all but 2 million of which are coming out in the next fortnight.
Escrow Watch is Stockhead’s monthly recap of the ASX companies that are releasing shares currently in escrow (also known as restricted securities) over the coming weeks.
ASX shares in escrow are “locked away” and not listed on the bourse so owners can’t sell them – until they’re released.
This is intended to depict to would-be investors when raising capital that the management and previous investors are still committed to the venture and aren’t raising capital just so they can “sell out”.
While there’s no guarantee holders of escrowed shares will sell at that point, the mere fact that they will be able to is worth knowing – particularly if shares have substantially moved one way or the other.
Click here for a more detailed description of the ASX rules surrounding escrow arrangements.
The company releasing the most shares – both as a percentage of shares on issue and number – is Amaero International (ASX:3DA) which is releasing 85.5 million shares in escrow which accounts for 72.9% of its shares on issue.
Amaero is in the additive manufacturing space from a tertiary research background, having been spun out of Monash University in 2013. It listed on the ASX in December 2019.
The company had some struggles when COVID-19 first broke out but is currently sitting at a healthy 65% premium to its listing price.
While not all stocks in this space have had success, it has impressed through its collaborations with big names including with Boeing and Rio Tinto (ASX:RIO).
Just behind is power substation construction and maintenance businesses Genus Plus (ASX:GNP) which is releasing 85.3 million shares – around 54.84% of its shares on issue.
Genus Plus is also trading at premium to its IPO price of ~40%.
Not so successful in terms of stock price is Openpay (ASX:OPY).
This BNPL company is releasing 24.84 million shares in escrow worth 23.45% of its shares on issue.
It listed at $1.60 two years ago and traded as high as $4.70 in August last year as investors and consumers embraced the BNPL sector.
But since Afterpay (ASX:APT) announced a tie up with Square – and the big banks have launched their own BNPL services – Openpay and its competitors have lost ground.
Another IPO that has lost ground is Nuchev (ASX:NUC) which listed at $2.60 and is now at 60 cents.
Initially investors were intrigued by its niche speciality in goat milk infant formula but the disruption of trade between Australia and China has hit virtually every company trying to make money from it.
One company with a release of shares in escrow unrelated to an IPO is distribution company Stealth Global (ASX:SGI).
In resources the biggest release is being made by North America focused gold and silver explorer Gold 50 (ASX:G50), led by veteran mining leaders Rob Reynolds and Bernard Rowe.
This company, which will release 5.7 million shares which represent 11.33% of its shares on issue, listed in August at 25c per share and is currently sitting at 28c per share.
While the former company is trading at a slight discount, the latter is up 50% since listing.