Regarding pricing of the new shares, I see it this way:
1) If you price the new shares at market price, the share price can be expected to remain unchanged before and after the new shares are issued. This means that from a relative point of view, it does not matter to your investment if you choose to buy or not. The new shares will be as cheap/expensive as you current shares.
2) If you price the new shares below market price, the average share price can be expected to drop after the new shares are issued. This means that you lose money if you don't buy into the new shares or somehow sell your rights to the new shares.
3) If you price the new shares above market price, the average share price can be expected to increase after the new shares are issued. This means that you have no incentive to buy into the new shares.
So the pricing of new shares affects the incentive to buy or not. Using this logic, it would make sense for GE to price the new shares high relative to the market price, to create an incentive for existing investors to NOT buy into the new shares. This would allow GE to get more of the newly issued shares. So why do they price the new shares at a 30% discount compared to the market value? This should make every existing investor keen to buy all the new shares they are entitled to (100%*240SEK/340SEK=70%). This is indeed odd...
I see two potential reasons
1) This is a game of poker between GE and Elliot. Elliot is already heavily invested in Arcam, and maybe GE senses that the size of this share issue will make it difficult for Elliot to get the money required to stay in the game.
GE: "we raise. Do you call or fold?".
Elliot: "F#%k you Bast!%ds".
2) GE has some other sinister plan to use the cash from the newly issued shares to grow the company, while making sure the stock price remains flat, so that investors get no return on their investment.
I believe in option 1, a game of poker between GE and Elliot.
AI
