Escrow Watch: These are the companies about to drop stock into the ASX
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Want to know when shares are coming out of escrow? We’ve been keeping tabs, so you don’t have to.
Every two weeks, Stockhead takes a look at the small cap companies that are releasing shares that have been locked away in escrow.
Escrow refers to shares that are held by early investors or directions restrained from selling for a year or two. The release of escrowed shares can have a big impact on stock price, because a sudden influx of stock onto the market can depress the shares you own.
This coming fortnight there are nine small and smallish caps about to drop their loads on the ASX — some 27.6m shares.
The biggest drop is from Mesoblast (ASX:MSB) — not really a small cap, we know — but the delivery from Stavely Minerals (ASX:SVY) will have far greater import.
Both are releasing about 8m shares into the market, but where Mesoblast has almost 500m shares on issue Stavely has just 181m.
That works out at about 4 per cent of its issued stock now allowed to trade freely on the market.
Stavely recently bailed out of buying BCD Resources and the Beaconsfield gold processing plant and was served a writ of summons to force it to continue with the deal.
This came just after the company reported high-grade copper hits at its Thursday’s Gossan project in western Victoria of up to 5.05 per cent copper and 6.06 grams per tonne gold, so it’s not all bad news.
While news of an escrow release can make a share price turn south, Rhipe (ASX:RHP) preceded its with the welcome news of an upgrade to full-year operating profit guidance: investors can now expect that to surpass $12.5m.
And 2020 guidance has been ramped up to $16m.
But there’s no dividend on the horizon yet. The board is putting all of the extra money into IP, marketing and sales growth.
Ocean-rescue-turned-music-streamer Jaxsta (ASX:JXT) is releasing more shares into the tradeable pool, just as it extended the payment terms for the sale of its old business.
Jaxsta is trying to sell its old Marine Rescue Technologies business to Perth-based Secure2Go, a company that only recently stopped trying to list after launching a prospectus in 2016 for a $4-5m IPO.
The deal was done in December, but by last month it had to drop the price from $6m to $4.4m. Secure2GO was supposed to pay $3m by the end of June — now end of July.
If it doesn’t, the original price still stands.
Jaxsta does need the cash.
It raised $3.3m in May, adding to a kitty of $1.7m. But its estimated spending — its launching a brand new business after all — comes in around $2.1m for the current quarter and the company doesn’t have any income yet.