We’re pleased to report that today Elsight Limited (ASX: “ELS”) announced that key shareholders have entered into a voluntary escrow agreement for 44m unrestricted ELS shares, being 46% of Elsight's issued capital. As per the price chart below, the announcement in May of 50% of the market cap being released from escrow caused a fall from 70c to 35c! Today’s announcement saw a 10% rise to 40c.
26m shares (59% of the escrowed stock) is restricted till 30 June 2020, with the balance till 31 March 2020. The agreement limits the ability for the escrowed stock to be sold on-market. The stock is able to be sold by the parties during the restricted period under the following circumstances:
- off-market at any time;
- on-market during any week immediately following a week in which more than 20 million shares in the Company were traded on the Australian Securities Exchange; or
- on-market at any time to fund the payment of a debt owing to a taxation authority, incurred as a result of the acquisition of shares in the Company.
This is very positive for the stock as if any of the parties wish to sell they need to find their own buyers rather than soak up the market demand. Up until now, investors have been hesitant to buy with the escrow overhang. So the 33c last week should be the low for the stock going forward.
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Corporate Adviser to Elsight
Corporate Finance - Executive Director
Gleneagle Securities (Aust) Pty Limited
Level 27, 25 Bligh Street, Sydney NSW 2000
Ph: +612 8277 6683