The S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a disappointing decline. At the time of writing the benchmark index is down a sizeable 0.9% to 6,072.2 points.

Four shares that have not let that hold them back are listed below. Here’s why they are storming higher today:

The Costa Group Holdings Ltd (ASX: CGC) share price has jumped over 8% higher to $3.21 following the release of its half year results. For the six months ended 28 June 2020, Costa posted revenue of $612.4 million. This was an increase of 6.8% on the prior corresponding period. On the bottom line, Costa reported a net profit after tax of $45.8 million. This is an increase of 12% on the prior corresponding period.

The Flight Centre Travel Group Ltd (ASX: FLT) share price is up 4% to $13.10. This morning analysts at Morgan Stanley retained their overweight rating and $16.00 price target on the travel company’s shares. The broker estimates that Flight Centre has enough liquidity to see it through to the end of next year. In light of this and its solid performing corporate business, it believes a re-rating of its shares could be coming in the medium term.

The Polynovo Ltd (ASX: PNV) share price has stormed 7.5% higher to $2.17. News that the medical device company’s chairman has been buying shares following a drop this week appears to have boosted sentiment. David Williams picked up 500,000 shares on market for an average of ~$2.04 per share on Thursday.

The Pointsbet Holdings Ltd (ASX: PBH) share price has rocketed 55% higher to $11.63. Investors have been buying the sports betting company’s shares following its full year results release and the announcement of a partnership with NBC. In respect to the former, Pointsbet tripled its revenue in FY 2020 despite the disruption caused by the pandemic.

More reading

• ASX shares are on track for new record highs. Here’s why…
• ASX 200 down 0.9%: Costa impresses, Harvey Norman profits grow, Appen downgraded
• Pointsbet share price on watch as FY20 revenue triples
• Costa share price in focus following half year results
• 5 things to watch on the ASX 200 on Friday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd and POLYNOVO FPO. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a disappointing note. At the time of writing the benchmark index is down 1% to 6,063.1 points.

Four shares that are falling more than most today are listed below. Here’s why they are tumbling lower:

The A2 Milk Company Ltd (ASX: A2M) share price is down 2% to $17.65. This morning analysts at Citi retained their sell rating and $17.20 price target on this infant formula company’s shares. It believes recent substantial insider selling is a bad sign. Especially at a time when the company is facing excess inventory and longer term regulatory risks, geopolitical issues, and increased competition.

The Appen Ltd (ASX: APX) share price is down 6% to $36.20. Investors have been selling the artificial intelligence company’s shares after analysts at Credit Suisse downgraded them to an underperform rating with a reduced price target of $29.00. This follows a weaker than expected half year result from Appen. A big second half will be required to meet its guidance for FY 2020, but the broker notes that it is facing currency headwinds.

The Huon Aquaculture Group Ltd (ASX: HUO) share price has fallen 2% to $3.18. This follows the release of the salmon producer’s full year results and the announcement of an equity raising. This morning Huon completed its institutional placement, raising $64 million at a discount of $3.00 per share. These funds will be used to pay down its debt.   

The Newcrest Mining Limited (ASX: NCM) share price has dropped 3.5% to $31.06. Investors have been selling Newcrest’s shares after a pullback in the gold price overnight. The precious metal came under pressure after the U.S. dollar and Treasury yield rose following comments by the U.S. Federal Reserve. At the time of writing the S&P/ASX All Ordinaries Gold index is down 3%.

More reading

• 2 top ASX tech shares to buy and hold beyond 2025
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises 0.2%, Afterpay reports FY20 result
• Is it finally time for ASX investors to buy gold?
• Why Appen, Link, LiveTiles, & Zip shares are dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price is slightly higher today, up 0.38% at the time of writing to $2.66. This came after the company released its annual report for the year ended 30 June 2020.

What were the FY20 results?

Paradigm reported a revenue of $4.7 million in FY20, up 44.67% compared to the 2019 financial year. The revenue included interest income and an R&D tax incentive. 

The biotech company posted a net loss of $12.3 million for FY20, 21.30% lower than the loss for the same period in FY19. There were nil asset impairments in FY20. R&D spending and employee expenses were both lower compared to the prior financial year.

The company had earnings per share of -6.12 cents in FY 2020 compared to earnings per share of -10.93 cents in FY 2019.

Paradigm had cash of $103.9 million at 30 June 2020, compared to cash of $72.3 million at 30 June 2019.

Paradigm interim chair Paul Rennie said the company was about to start pivotal Phase 3 clinical trials in the USA and EU. “… we look forward to advising the market about our progress with the submissions to the EMA, the FDA and the TGA in the coming months.”

About the Paradigm share price

Paradigm is a biotechnology company that is developing a drug for the treatment of osteoarthritis. It has been listed on the ASX since 2015.

In July 2020, Paradigm announced that it had observed a mean pain reduction of 65% across 10 patients on a 12-week program after being treated with Zilosul under an FDA-approved program in the USA. This was the company’s first FDA-approved program.

In June 2020, Paradigm was added to the S&P 300 list of the biggest 300 companies by market capitalisation.

In April 2020, Paradigm raised $35 million from investors at a price of $1.30 per share.

The Paradigm share price is up 149% since its 52-week low of $1.08, however, it is down 9.73% since the beginning of the year. The Paradigm share price is up 86.81% since this time last year.

More reading

• What is the most exciting ASX small-cap share of 2020?
• Top brokers name 3 ASX shares to sell today
• Why the Paradigm share price is rising today

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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A new study has found stock investors concerned with ethical issues ‘overreact’ in protest.

AMP Limited (ASX: AMP) and Rio Tinto Limited (ASX: RIO) have recently hit the headlines for negative environmental, social and governance (ESG) issues.

A Monash University study found investors and fund managers who wanted to sell the shares in protest would have been better off waiting 90 days after a scandal.

Monash Business School researcher, Dr Bei Cui, said there is definitely a pattern of sell-offs after a company is rocked by an ESG crisis. She commented, “The research findings show traders have an opportunity to buy these stocks at a discount and then sell at a profit. It also suggests that investors wishing to reduce exposure following bad ESG news can sometimes be better off waiting, in some cases up to 90 days after the announcement — to execute the necessary trades at a better price.”

The research analysed more than 331,000 ESG events over 19 years and their impact on the share prices of large and mid-cap companies.

A sudden drop in a company’s share price does have a protest impact. 

But the Monash study guides investors who want to both minimise their financial loss and eliminate exposure to an unethical company.

Local companies under fire

AMP has been rocked by a series of scandals extending back two years, including fee-for-no-service, the financial services Royal Commission and several sexual harassment cases.

Rio Tinto has been criticised this year for blowing up the Juukan Gorge site in Western Australia, despite protests from archaeologists and Indigenous groups about its cultural significance.

This week the mining giant announced some of its executive bonuses would be cut as a result, but that action and its internal report was panned as insufficient.

“The report from the Rio Tinto board review does not deliver any meaningful accountability for the destruction of some of the most significant cultural sites in Australia,” said Australian Council of Superannuation Investors Chief Executive, Louise Davidson. “The company should explain why greater accountability was not applied in light of this disaster,” she added.

Dr Cui’s research also found a company’s share price often starts trending up or down several days before the actual ESG event, suggesting information leaks are at play.

What about good ESG?

The good news is that companies that announce positive ESG news underperform the market afterwards. This means bargains could be snapped up by ethical investors.

Australia and New Zealand shareholders lead the way in supporting ESG, with 63.2% of capital invested in ethical companies.

According to Monash, this is a higher percentage than in Europe, the United States, Japan and Canada.

More reading

• Why the IGO share price is outperforming the ASX 200 today
• ‘Destroyed’: AMP faces more sexual harassment allegations
• 3 ASX dividend shares to buy before it’s too late
• What are dividend shares and how do you find them?
• AMP still looking pretty sick even after sackings

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Australian Finance Group Ltd (ASX: AFG) share price is down almost 4% this morning after the mortgage group reported a 15.3% increase in profits despite economic upheaval.

The coronavirus pandemic has resulted in a flurry of lodgements as borrowers search for better deals on their mortgages, boosting AFG’s bottom line. 

What does AFG do? 

AFG began as an aggregator, providing mortgage brokers with access to products and support. It has now diversified to offer business finance, insurance, and AFG-branded and securitised products throughout Australia. One of the country’s largest mortgage provider companies, AFG has around 2,975 finance brokers offering customers a choice of more than 3,800 financial products from a range of lenders.

What did AFG report?

AFG reported its best financial result to date, with NPAT of $38.1 million, a 15.3% increase on FY19. Underlying NPAT increased 27% to $36.3 million. AFG reported residential settlements of $34.1 billion in FY20, up 8.9% on FY19. Business settlements were up 167% to $346 million. This gave a combined residential and commercial loan book of $163 billion at the end of FY20, a 5% increase on FY19.

A final dividend of 4.7 cents per share was declared, fully franked. In addition to the interim dividend of 5.4 cents, this represents a dividend yield of 6% over the past 12 months. 

All divisions delivered growth with overall lodgements up 22% year on year. The company experienced a significant increase in lodgements as it navigated the initial impacts of COVID-19. Moving into the first quarter of FY21 lodgement activity remains robust, representing an increase of 28% on July 2019.

CEO David Bailey said the residential business was well-placed to reap the initial financial benefit of increased lodgment activity, heading into the new financial year.

However, he said uncertainty remained around the broader impact on the Australian economy for the balance of the new financial year. 

What is the outlook for AFG?

AFG has warned that the full scale of future disruption to residential and commercial lending markets is difficult to predict and likely not yet fully realised. Said Bailey:

Our business model generates strong cash flow and is supported by a trail book that will generate cash flows which are actuarily reliable. AFG’s business model continues to be capital light, however we maintain a cautious outlook.

In the meantime, the company is awaiting court approval of its proposed merger with Connective. The ACCC has cleared the transaction, which will create Australia’s largest mortgage aggregator.

More reading

• Why a2 Milk, Appen, Huon, & Newcrest shares are tumbling lower
• The Paradigm share price is up today. Here’s why
• ‘Ethical’ share investors sell too quickly after bad news
• Dicker Data share price surges following interim results
• Tech company Limeade pushes higher following half year update

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Dicker Data Ltd (ASX: DDR) share price has surged 4.76% higher today after the release of results for the first half of the year to 30 June 2020.

The Dicker Data share price is trading at $8.14 at the time of writing after finishing the day yesterday at $7.77.

How did Dicker Data perform in 1H FY20?

The Australian wholesaler and distributor of computer software and hardware delivered strong growth across all key metrics for 1H FY20.

Dicker Data achieved a milestone breakthrough with a total revenue of $1,006.1 million, up 18.1% compared to the prior corresponding period. This was underpinned by growth in established and new vendors, increased gross profit margins, and maintenance and control of operation leverage.

At country level, Australia and New Zealand grew revenues by 17.2% and 31.9%, respectively.

On the bottom line, net profit after tax jumped 23.6% to $29.4 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $47.1 million, up 27.6% from the previous $37 million realised.

The company recorded a positive cash flow from operating activities of $30.3 million, an increase of $14.6 million.

Earnings per share leapt 16% to 17.08 cents.

Earlier this month, Dicker Data declared a full franked dividend of 7.5 cents per share to be paid on 1 September.

How good is the outlook?

Management noted that the business has proved resilient as the coronavirus outbreak continues. The recent surge in demand in remote work and virtual working stations across the company’s hardware and software portfolio highlighted the essential role played by IT distribution in enabling business continuity.

Furthermore, Dicker Data anticipates demand to remain strong moving into the second half of the year by offering business support to its vendors post COVID-19.

Over the next 12 months, construction of the company’s new distribution centre is expected to expand operations and help boost revenue growth.

About the Dicker Data share price

The Dicker Data share price has made a stunning recovery since plummeting to a 52-week low of $3.90 in March. While trading 11% lower than the $8.73 reached in June, the Dicker Data share price has risen 14.6% in year-to-date trading.

More reading

• Reinvest your Coles dividends in these top ASX shares
• 2 top ASX shares I would buy now for shareholder value and dividend growth
• Why I would buy Coles and this ASX dividend share today
• 3 ASX shares to buy and hold through COVID-19
• 2 high yield ASX dividend shares to buy today

Motley Fool contributor Aaron Teboneras owns shares of Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Limeade Inc (ASX: LME) share price is pushing higher on Friday following the release of its half year results.

At the time of writing the employee experience software company’s shares are up 2% to $1.50.

How did Limeade perform in the first half?

Limeade was a strong performer in the first half and appears to have navigated through the pandemic with minimal disruption.

According to the release, for the six months ended 30 June 2020, the company recorded a 26% increase in subscription revenues to $27.4 million.

Also heading in the right direction was its gross margin, which improved by 1 percentage point to 77.1%. Management advised that this reflects positive customer mix attributes, higher value contracts, and operational efficiencies.

Pleasingly, operating expenses grew slower than its revenue. They increased 19% on the prior corresponding period to $22.3 million. Combined with its gross margin improvement, this ultimately supported a significant improvement in its earnings.

Limeade posted a pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $0.7 million. This was an improvement of 58% on the prior corresponding period.

At the end of the period the company had a strong balance sheet with cash of $28.4 million and no debt.

Management commentary.

Limeade Founder and CEO Henry Albrecht said, “Despite the global COVID-19 pandemic and recession, customer retention remains strong and long-term demand for our employee experience solutions has grown significantly. I’m thrilled to see the blue-chip enterprise Limeade customer base – and expert market influencers – recognize Limeade as a pioneer in accelerating both the digital and cultural transformation of work.”

“We play in a huge, global market where modern technology is needed more than ever. And we have built a highly resilient and purpose-driven culture – one that innovates and delivers real customer value in all economic climates,” he added,

Outlook.

Management revealed that its total pipeline is up 61% from 30 September 2019 to $219 million. Of its qualified pipeline, $18 million sits within the ‘Finalist & Verbal’ pipeline and $57 million in ‘Develop & Prove’ pipeline.

Together with its first half performance, this has given the company confidence to maintain its FY 2020 guidance. It continues to forecast revenues of $56.1 million, an EBITDA loss of $5.5 million to $6.5 million, and a net loss after tax of $7 million to $8 million.

More reading

• Dicker Data share price surges following interim results
• 3 reasons why I’d buy cheap stocks today before the next stock market crash
• Boral share price drops lower after $1.1 billion FY 2020 loss
• Orocobre posts big FY 2020 loss and launches $156 million equity raising
• Resolute Mining share price on watch after half-year result

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Buying cheap stocks today may not be an appealing idea to many investors. After all, the prospects for the global economy continue to be very uncertain, and some companies may struggle to adapt to changing consumer tastes in a post-coronavirus world.

However, low valuations within some sectors mean that now could be the right time to buy a diverse range of shares. They could outperform other mainstream assets and allow you to generate impressive returns.

Cheap stocks that account for future risks

While some cheap stocks are priced at low levels for good reason, others appear to be suffering from weak investor sentiment towards their wider industry and stock market. For example, some companies have solid balance sheets, strong cash flow and strategies that could produce improving financial performances in the coming years. Yet they have valuations that, in some cases, were last seen during the global financial crisis.

Furthermore, their valuations suggest that investors have factored in many of the risks faced at the present time. For example, risks such as the ongoing threat of containment measures caused by coronavirus and political uncertainty caused by Brexit appear to be accounted for in the low valuations of many stocks. This could mean that now represents a buying opportunity, since they appear to offer wide margins of safety that may lead to impressive capital returns in the long run.

A lack of other opportunities

Buying cheap stocks now may also be a good move due to the lack of other opportunities for investors. Low interest rates mean that bonds and cash are unlikely to produce strong positive after-inflation returns over the medium term. Similarly, high house prices mean that investing in property may be unable to provide the level of returns than many investors currently desire.

Therefore, buying a diverse range of stocks today could be a means of generating relatively high returns over the long run. The past performance of the stock market shows that it has always recorded new record highs after its bear markets and downturns. Buying shares while they are undervalued may enable you to benefit from its likely recovery following the market crash.

The next market crash

Of course, nobody knows when the next market crash will occur. It could take place imminently, or may be many years away. After all, many of the key risks facing investors have been present for a number of months. Therefore, cheap stocks today may fail to move even lower in price, thereby making them an attractive investment opportunity at the present time.

Certainly, the stock market will not make uninterrupted gains. However, with many stocks currently appearing to offer wide margins of safety, now could be the right time to buy a range of them and hold them for the long run.

More reading

• Dicker Data share price surges following interim results
• Tech company Limeade pushes higher following half year update
• Boral share price drops lower after $1.1 billion FY 2020 loss
• Orocobre posts big FY 2020 loss and launches $156 million equity raising
• Resolute Mining share price on watch after half-year result

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Boral Limited (ASX: BLD) share price has come under pressure on Friday following the release of its full year results.

At the time of writing the building products company’s shares are down 1% to $3.80.

How did Boral perform in FY 2020?

It was a very difficult year for company, culminating in a previously announced net non-cash impairment totalling $1,316 million.

For the 12 months ended 30 June 2020, Boral recorded a 2% decline in sales revenue from continuing operations to $5,728 million.

Things were much worse for its earnings. Boral reported a 30% decline in earnings before interest, tax, depreciation & amortisation (EBITDA) to $710 million. EBITDA from continuing operations came in at $715 million, down 29% and reflecting lower EBITDA from all three divisions.

Boral Australia posted a 5% decline in revenue and a 25% reduction in EBITDA to $447 million. This reflects lower pricing outcomes, higher costs, and lower production.

Boral North America wasn’t any better, with revenue down 2% to US$1,566m and EBITDA down 32% to US$188 million. This was driven by lower sales volumes, higher costs, and ~80% of plants experiencing COVID-19 related volume impacts and disruptions.

It was a similar story for the USG Boral joint venture. Its underlying revenue was down 8% to $1,474 million and EBITDA was down 25% to $190 million. This reflects housing downturns in South Korea and Australia, price declines in South Korea, and a significant impact from COVID-19 related plant closures and production slowdowns.

This ultimately led to Boral reporting net profit after tax before significant items of $181 million, down 57% on the prior year. Including significant items, the company posted a statutory net loss after tax of $1,139 million.

In light of this, no final dividend will be paid by the company.

“Challenging year.”

Boral’s new CEO & Managing Director, Zlatko Todorcevski, commented: “Boral’s FY2020 results reflect a particularly challenging year. Following the lower than expected first half result from Boral North America, Boral had a difficult start to the second half of FY2020.”

“Boral Australia was impacted by bushfire and flood-related events in Australia, resulting in significantly lower volumes and higher costs. This was quickly followed by COVID-19 disruptions, resulting in higher costs and production curtailments, which substantially reduced earnings for all divisions. Overall, second half margins were substantially down, as flagged in the Company’s market update in May, due to lower sales and even lower production volumes together with an unfavourable shift in the sales mix and cost,” he added.

Will things be better in FY 2021?

While no guidance has been provided for FY 2021 due to the uncertain economic environment, management did reveal that its performance is improving.

Mr Todorcevski said: “We have started FY2021 with lower revenues but only slightly lower earnings relative to the same time last year. Overall, EBITDA margins in July recovered relative to 2HFY2020 and were broadly in line with 1HFY2020.”

“We are experiencing less disruptions in most businesses, providing an opportunity for improved outcomes, however, there is potential for further disruptions and uncertainty remains. For example, it is unclear how long stage 4 lockdowns in Melbourne will continue. At this stage of the lockdown, concrete volumes in our Melbourne metro business are down ~20% relative to last year. “

“In the USA, we are seeing a pleasing start to the year, with evidence of demand strengthening and July sales volumes improving relative to recent months. However, sales are still down year on year and there is considerable uncertainty around the economic recovery and the ongoing disruptions associated with COVID-19, including a high level of absenteeism in a number of businesses and the industry more broadly, which is impacting operations and lead times.”

Management also advised that it is currently completing a review of Boral’s portfolio of businesses to assess the market outlook, competitive position, and earnings potential of each business. A further update on this will be given in October.

More reading

• Boral cops $1.3bn body blow to profits could signal impending cap raise
• Top broker warns Afterpay and these ASX stocks could disappoint on profit results
• The rocketing Aussie is shaping up as a new threat to the profit season

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Orocobre Limited (ASX: ORE) share price won’t be going anywhere on Friday after the lithium miner requested a trading halt following its full year results release.

How did Orocobre perform in FY 2020?

It certainly was a tough year for Orocobre following a further collapse in lithium prices amid an oversupply of the battery making ingredient and subdued demand.

For the 12 months ended 30 June 2020, the company posted a 50% decline in revenue to US$77.1 million and a US$67.1 million loss after tax. The latter compares to a net profit after tax of US$65.4 million a year earlier.

This loss includes impairments, foreign exchange movements, and other one-off items.

Potential deal with PPES.

The company also revealed that it has entered into a non-binding memorandum of understanding (MOU) with PPES. This is a joint venture between Toyota and Panasonic which specialises in the production of automotive battery cells.

This MOU is for the long-term supply of product culminating in 30kt of lithium carbonate equivalent in 2025. Management anticipates that the majority of the volume will be in the form of battery grade lithium hydroxide from its existing Naraha plant.

Though, it is worth remembering that MOUs are not legally binding and therefore there is no guarantee that it will go ahead.

Equity raising.

Finally, the reason for the trading halt is Orocobre launching an equity raising this morning.

The lithium miner is aiming to raise $126 million via a fully underwritten placement of 50 million new shares at a price of $2.52 per share. This represents a 13.1% discount to its last close price.

Proceeds from the equity raising will be used to allow the company to fully fund Olaroz Stage 2 and deliver the Olaroz Stage 1 ramp up through a range of operating, COVID-19, and pricing environments, as well as capital for future growth initiatives.

The company will then attempt to raise a further $30 million from retail shareholders via a share purchase plan.

More reading

• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• Are ASX lithium shares the next big thing?
• These are the 10 most shorted shares on the ASX
• Orocobre share price shrugs off low lithium prices to soar 33% higher in July

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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