AMTE Power (LON: AMTE) shares are down that another 76% this morning. AMTE shares have lost 97% of their value over the past 6 months. As we’ve been saying they really should have moved earlier. Their burn rate in developing their new batteries was such that they should have had the rights issue that 6 months back.
As we actually said 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. The other thought is that clearly all those discussions with other capital providers now start at this much lower level of the share price. Perhaps people weren't willing to invest close to the old price and perhaps they'll be happier at a price 71% lower. Of course, if they're still not happy with the idea of investing at this price then perhaps there's no hope for AMTE - other than whatever value someone would pay when buying it out of administration.”
That delay in gaining the funding is what has caused the massive losses here for shareholders. We’d even suggest that this is - for the management and also their financial advisers - somewhere between really not very good at all and a dereliction of fiduciary duty. Getting that capital structure right is, after all, part of that fiduciary duty.
AMTE Power share price from Google Finance
The announcement today: “The Issue Price represents a discount of approximately 81.62% per cent. to the closing middle market price of 9.25 pence per Ordinary Share on 7 September 2023, being the latest practicable date prior to the publication of this announcement.” Well, if that’s the price necessary to get the issue away then that’s the price necessary.
We’ve talked of AMTE here and their travails in raising the necessary capital.
Our only real comment here is that this is seriously bad management. An emergency rights issue back 6 months would have been done at a much higher price. The appallingly low one now is simply because AMTE really, really, needs the cash and right now. Being desperate always makes money expensive
