3 capital raising companies to watch

Financial Journalist
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A long, growing list of Australian companies have raised equity capital during the Coronavirus (COVID-19) pandemic. Most commentary on these offers typically focuses on whether eligible shareholders should subscribe, rather than the company’s long-term prospects. 

Emergency capital raisings can provide short-term gains for eligible active investors who trade stock bought in a heavily discounted offer. Such offers can also weigh on a company’s long-term Return on Equity (ROE), dilute small shareholders and destroy value. 

The trick is finding high-quality companies that raise capital during market shocks to grow, rather than backing those needing funds to survive. A heavily oversubscribed capital raising can be a good sign as it shows investor confidence and removes funding risks for the company. 

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