Q: hey guys can you please explain the split and the ipo on nasdaq the valuation does not seem fair to unilaterally fix the offering at a price that much lower than current valuation down 14 % thanks as always
5i Research Answer:
The share consolidation is 1 for 1.5 shares. It essentially results in a higher stock price but fewer shares for shareholders. Mathematically nothing changes, but it helps with stock issues in the US market. The discount on the offering is not overly unusual. Listing on Nasdaq does not usually work well unless some investors can get shares and be committed. The discount on the issue helps faciliate a successful financing and helps ensures new shareholders are 'happy' with their purchase. While it may not seem fair, if its listing on Nasdaq is successful over the time it will help the valuation multiple substantially.