In the old days, the early 2000’s, SPPs weren’t necessarily tied to other capital raising initiatives. With the maximum at $2,500, then $5K, companies could run a SPP and pick up some cash. No-one got too much of an allocation, things were peaceful. Then by the GFC, the top amount went to $10K and quickly to $15,000. This is serious money for many, and uptake became polarising if the discount was sufficient. Applications began getting scaled back. Strategies like just holding a few became more common, as in SPPHarvester and the like.
More recently, when the 10 year ‘sunset clause’ was due to be remade, at Oct 2019, the limit increased to $30,000, initially for 12 months then ASIC extended it during the the Covid downturn, when corporates thought to bolster balance sheets. So it sits at $30K.
With the opportunity to top up at a discount (usually), I find it a good way to invest if I can see the money going to benefit the company – growth, an accretive acquisition (sometimes to lower debt). However, of the 10 or so I have participated in, only three have allowed the full application. MIR was one, AR9 also and spectacular for me , and the third, EOL, was limited to $11K.
Currently, 4DX, PKS and CXL have all scaled me back, usually in the order of 70-80%; expecting DEM, closed early, to do similar.
It is annoying, as the directors have discretion as to how and it becomes a guessing game. Another aspect is the release of information is patchy and poorly conveyed. I have first learned of allocations by noticing the share increase on broker site.
And to tie up $120K with uncertain outcome is tricky. And the other warning for players; with early stage companies, probably not paying dividends, if the registry doesn’t have details, then money comes as a cheque, by snail mail. The catch is that details have to be lodged before the SPP closes (but this isn’t mentioned ealier)
[for CXL], holders with EFT details recorded will be paid today and should receive funds on April 14, 2021. Those without EFT details will be sent a cheque, which may take several days to process and send.