Cleansing notice

When you see a company issue a cleansing notice is this something to worry about or is it more in depth than that?

I picked up ESN in October, shares have jumped up nicely and they have now issued 2 cleansing notices in 2 days. Not sure what it means.
Cheers,
pete

Pete 1969 said:

When you see a company issue a cleansing notice is this something to worry about or is it more in depth than that?

I picked up ESN in October, shares have jumped up nicely and they have now issued 2 cleansing notices in 2 days. Not sure what it means.
Cheers,
pete

Click to expand...

A cleansing notice is a statutory notice a company must issue after placing new shares on the market. They are usually accompanied by appendix 3Bs. Their purpose is to tell the market that the company is in compliance of its continuous disclosure obligations and is not relying on any carve outs under the continuous disclosure regime. In other words the market is fully informed. This means the newly placed securities can then trade with no restrictions. Hope this helps. Above is my basic understanding but I am no lawyer.

Thank you Coolcup,
I just couldn't find much about what it means to the overall future of the shares involved and the asx info is basically useless to a novice like me.

I have a better idea now of what it is for from your post. I guess there will be some effect on the shares if they are allocating loads more.
Time will tell.
thanks again.
Pete

Not a problem. Were there any new shares issued recently?

Yes,
There were 25 million issued on the 6th and then a further 100 Million issued yesterday. I bought 400,000 shares @ 0.001 for these in Oct and they were at 0.005 yesterday. I see today they are back to 0.004 Thinking about if I should drop them now or wait. It is ESN if you want to have a look at them.
Also same deal with SPA, I got in at 12c with 8,000 shares (they were 4.5c a week before ) they had rocketed to 48c 4 weeks ago and have now dropped to 34c. This is the one that I see more buyers than sellers every day consistently and it is a big ratio, yet it is creeping back down... I wanted to hold them until they finalize the acquisition of Bulletproof in January, with prospectus due in a couple of weeks but not sure now either. Im thinking both of these maye hit their use by date and need to work out what I will do.
still new to this so I am treading lightly where I can.
Cheers,
Pete