blinkx BLNX (FTSE AIM All Share) Buy
Placing of 23m shares to fund “growth strategy”
blinkx has announced its intention to place up to 23,213,763 new shares
(approximately 7.5% of existing share capital) “to further strengthen
blinkx's balance sheet and to provide additional funding to support blinkx's
growth strategy”.
We observe that at its recent trading update blinkx reported a healthy
$17m cash balance having generated some $2m in contribution to cash in
the first half. We therefore conclude that one possible explanation for
today’s raise is that blinkx has identified an acquisition candidate; the
alternative would be a significant acceleration in its core business requiring
additional resources in areas such as marketing.
blinkx has so far not highlighted acquisition as a cornerstone of its growth
strategy.
Our rating remains “Buy
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