Next Investors logo grey

Institutions buy into ‘potstock’ buzz


Published 04-MAY-2016 15:01 P.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

MGC Pharmaceuticals (ASX:MXC) has offered more evidence that the ‘potstock’ buzz is real – closing a $5 million capital raise “multiple times oversubscribed”.

The medical cannabis player told the market this morning that institutional and sophisticated investors had applied for $3.5 million worth of shares raised at 4.4c each – with a free attaching option exercisable at 6.5c available for every three shares subscribed for.

MXC, however, soon found that demand outweighed supply and so made another $1.5 million worth of shares available – bringing the bookbuild closing at $5 million.

The shares were offered at a 19% discount on its previous trading price.

Additional shareholders will be given a chance to buy into the action, however, with MXC also announcing a priority rights offer at the same price – with punters given the opportunity to buy up to $15,000 worth of shares.

The PRO will also come with a free attaching option and MXC is aiming to raise another $2 million from this, although it has set aside another $500,000 worth of shares in case of another oversubscription.

The company said the funds raised from the offers would go towards a number of things, including: the construction of a Slovenian medical cannabis growing facility; a research lab and cannabidiol extraction centre; and to continue the development of its push into Australia.

Early in April it announced a five-pronged plan to enter the Australian market – with the aim of taking advantage of what the University of Sydney has labelled a $150 million opportunity.

The medicinal cannabis player had focused on the European market through the development of cosmetic products derived from cannabidiol – but has recently pivoted to become more of a pharmaceutical player.

It now, however, has its sights set on the Australian market which has opened up following a series of positive legislative changes allowing for cannabis to be grown for medical purposes.

These changes include things such as downgrading cannabis from the prohibited list to a lower class of medical drug which contains things such as morphine.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.