It is always a dangerous strategy to jump too early into a stock that has suffered a major sentiment change. But the case of super fund administrator and registry operator Link Group (LNK) could be the exception to the rule. I reckon that this is a growth stock for the bottom drawer.
Four weeks ago today, Link announced an institutional placement to raise $300 million. This was completed at a price of $8.50 per share, a very tight discount of just 2.4% to the then market price of $8.71. It was accompanied by a Share Purchase Plan for retail investors at the same price of $8.50 per share.
No specific reason was given for the raising, apart from “providing additional balance sheet flexibility to pursue strategic opportunities”. In a note to clients, Goldman Sachs speculated that Link may be looking to acquire online property transaction platform, Property Exchange Australia (PEXA), of which it currently owns a 19.7% stake.