- MGM Wireless (MWR) shareholders have been left wanting after the company’s latest announcement shared little new information about a “significant new contract”
- Investors were waiting with bated breath after the first catching wind of the major contract announcement back in May
- But two weeks later, COVID-19 issues have delayed the final signoff
- Coming out of a voluntary suspension today, MGM says it will keep shareholders updated with any new information as soon as it becomes available
- Simultaneously, the school solutions tech developer is carrying out a share purchase plan
- MGM wants to raise $1.5 million to develop its SPACETALK technology, which forms a major part of its kids safety smartwatch
- However, shareholders have reacted despondently to the lack of news, dragging down the MGM share price by 7.14 per cent to 13 cents each
MGM Wireless (MWR) shareholders have been left wanting after the company’s latest announcement shared little new information about a “significant new contract.”
Investors were waiting with bated breath after the first catching wind of the major contract announcement back in May. But two weeks later, COVID-19 issues have delayed the final signoff.
Because of the postponement, shareholders are still none the wiser about who the contract is with or which of MGM’s products it covers.
The trading halt and suspension
The reason for MGM’s initial trading halt on May 25 was twofold; in the ASX announcement requesting the halt, MGM said it was to announce a capital raise and a big new customer contract.
Two days later, on May 27, MGM requested a voluntary suspension, which was granted by the ASX. That was supposed to be lifted on June 1.
But on that day, MGM provided another update, in which it said it was unable to provide the necessary updates to the market. The reason? A delay in the imminent customer contract.
“The processes for execution of a new customer agreement of the significance and size the contract represents is taking longer than expected, with delays due to COIVD-19 and staff working from home also causing issues,” the company noted in the June 1 statement.
The capital raise
The next substantial announcement from MGM came out on June 5, right before the weekend. In the market update, investors received news that a new share purchase plan was on the cards.
MGM wants to raise $1.5 million to develop its SPACETALK technology, part of its kids safety smartwatch.
Under the plan, eligible shareholders can apply for up to $30,000 worth of shares at an issue price of 10.75 cents per share.
The plan is set to close on June 26. But in the same announcement, there was no further updates about the contract hinted at in late May.
What’s on the cards?
In today’s announcement, MGM came out of its trading halt, but had no concrete contract details to share with investors.
Instead, the company said it was progressing through the final stages of contract authorisation and execution. However, the ongoing pandemic had caused some logistical delays.
“Given the abovementioned delay, the company is not able to announce a completed transaction with the customer at this time,” MGM said today.
“The company will inform the market immediately once it is in a position to make an announcement about the customer contract outcome,” the company continued.
Shareholders have reacted despondently to the lack of news, dragging down the MGM share price by 7.14 per cent to 13 cents each at market close.