Top 3 most bought Australian stocks
The top 3 most bought Australian stocks, 88 Energy, Core Lithium and Xero Limited, are undergoing an event of potential dilution to create more value for shareholders in the short to long term.
Read more about these companies and what they are doing with the additional shares.
88 Energy Limited (88E)
Trading at around AU$0.02, 88 Energy is the most bought Australian stock on our platform. The company is on track to commence drilling in the Merlin-2 appraisal well by 2022; this came after the company raised AU$24 million through placement shares. According to Ashley Gilbert, 88 Energy CEO:
"Completion of this placements positions 88 strongly, as planning and preparations continue for drilling of the Merlin-2 appraisal well in Q1 CY2022.
"Other key activities over the months include the targeted unlocking of value in our Yukon acreage."
The funds raised via the private placement contribute to the company's reserve cash and will be used for the "Merlin-2 appraisal well, broaden acreage lease payment and working capital, and support existing and new project opportunity."
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Core Lithium Limited (CXO)
Core Lithium limited is amongst the companies that outperformed Lithium prices; this came after the stock surged from AU$0.4 in Q4 2020 to AU$0.58 in Q4 in 2021, representing a growth of over 1000% in 12 months. As an explorer and developing Lithium producer, Core Lithium has been at the core of securing contracts and acquiring rights to various mines to position itself as the leading Lithium producer globally.
During the CY 2021 period, the company issued additional shares through various private placements, which enabled the company to raise more capital. These placements include a capital raise of AU$91 million at AU$0.31 per share. This enabled the company to fast track stage one of the Finniss Lithium Project - production is expected in late 2022. This was one of the strongly supported placements.
Commenting on the transaction, Stephen Biggins, Core Lithium CEO, said:
"We are pleased with the overwhelming support received in the placement in this transformational moment for Core.
"Together with the Ganfeng Equity Investment and a share purchase plan, we are now fully funded to complete stage - develop of Finniss and have the financial flexibility to assess future growth initiatives"
Eighty percent of the project's output is already under a 4-year takeoff agreement with one of the world's largest lithium producers, Ganfeng, and Tesla's key supplier of Lithium, Yahua.
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Xero Limited (XRO)
New Zealand accounting service provider, Xero, started the CY2021 off with acquisitions to expand its clientele. These acquisitions include Planday, a workforce management platform, and TickStar, an e-invoicing technology provider.Included in the settlement for the acquisitions is payment divided between cash and shares.
To enhance its e-commerce capacity and expand into small businesses, Xero further announced that it would be acquiring LOCATE, a US cloud-based inventory management producer. According to the settlement agreement, the acquisition will be settled via 20% cash and 80% shares, valued at $19 million.
Commenting on the Acquisitions, Xero CEO Steve Vamos added that:
"The LOCATE acquisition supports our strategic priority to grow the small business platform, strengthens our ecommerce offering and supports our growth opportunities in North America and globally as we strive to be the most insightful and trusted platform for small business."
The acquisition was later followed by a proposal to issue additional shares valued at an est. AU$15.2 million (103 223 shares).
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Roundup
With more acquisitions on the table, the companies may continue to issue additional shares to raise capital to support their future and current projects/plans - this may be dilutive to investors in the short term period but could be an opportunity for long term gains through buying the dip where it's presented.
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Sources – EasyResearch, 88 Energy Limited, Core Lithium Limited, Xero Limited
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