AMTE Power (LON: AMTE) (FRA: 9FO) shares are down another 48% - meaning 90% or so since this disaster started - today. The collapse in AMTE is simply because they desperately require new capital. And few seem to be willing to provide it. Therefore we get this announcement today: “Having managed its resources, the Company now needs to implement a solution within the next few business days. Whilst active discussions continue with existing and potential investors, there can be no certainty of the outcome of these discussions, in which case putting the Company into administration is ever more likely. In the event that the Company is put into administration, trading of its shares on AIM would be suspended with immediate effect. Accordingly, should the Company be unable to secure additional funding, the prospects for recovery of value, if any, by shareholders would be remote.”
Well, that might be enough beating of the bush to flush out a cheque for a capital restructure. But even if it does shouting “We'll be bust in a couple of days” isn't the way to maximise the value on any such funding arrangement. And do note what they say, that in administration there would be no equity value - which is rather the same as stating that there's no equity value right now.
AMTE Power share price from London Stock ExchangeNow, it is vaguely possible that someone out there is so impressed with AMTE's battery technology that they'll pick it up. But there's also that idea that perhaps it would be cheaper to do so out of administration. So perhaps not that much of a comfort for current shareholders.
As we've said previously about AMTE: “Two thoughts do occur to us. The first is that perhaps AMTE Power should have started organising a rights issue a few weeks back. Announcing one wouldn't have trashed the share price by more than has already happen - we guess not at least - and gaining more capital from shareholders would have solved the problem.” They clearly did miss that opportunity and perhaps that's something to be rued. But that is what happened.
Obviously, there might be that bid or capital injection that keeps the show on the road. The hope of that is one reason why there's any value at all today to AMTE shares. The other is that at least some current holders will be asking themselves if it's even worth dumping stock at these prices. The value destruction has already happened so why try to gain those last few pennies? There's a flood of selling, yes, but it's not the entire ocean as yet.
