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What is an ASX Placement?

A Placement is where companies already listed on the ASX raise money by issuing additional shares. As there are not as many disclosure requirements for these listed companies (compared to IPOs), Placements are only available to Sophisticated Investors. Read more about Placements here.

It is recommended that investors approach such opportunities with caution and perform their due diligence prior to making an investment decision. Investors should also seek independent financial, legal and tax advice before proceeding.

How do I bid on a Placement?

Upload a Sophisticated Investor Certificate

In Australia, only Sophisticated Investors are allowed to bid for Placement shares. To qualify as a Sophisticated Investor, you’ll need to confirm that at least one of the following applies: 

• You have A$2.5m of net assets
• You have had a gross income of A$250,000 per year for the last two years
• You hold an Australian Financial Services License
• You are a Professional Investor

This is confirmed via a Sophisticated Investor Certificate issued by your accountant – who can either use their own certificate template or Stake’s template.

To upload your certificate to Stake:

• Open your Stake app 
• Make sure you have ‘AUS’ selected in the top right of your screen
• Select ‘More’ from the bottom menu
• Select ‘Profile’ at the top
• Scroll down to ‘Sophisticated Investor’ and hit ‘Apply’
• Upload your certificate as a PDF or photo
• Wait for us to review and approve your certificate. Once you receive confirmation, you’ll be able to bid on Placements
  OR
• On web, this is found at Menu (top right-hand corner) > Account > Scroll down the page to 'Sophisticated Investor certificate'
• Upload your certificate as a PDF or photo

If you have any questions about becoming approved as a Sophisticated Investor on Stake, you can contact Stake’s Capital Raises team by emailing capital-raises@hellostake.com.

Discover Placements on the Markets page

Once you’re approved as a Sophisticated Investor on Stake, you can access Placements currently open for bidding in the Markets section of your Stake app.

To view live Placements on Stake:

• Open your Stake app (bidding is not yet available on Stake’s web platform)
• Make sure you have ‘AUS’ selected in the top right of your screen
• Select ‘Markets’ from the bottom menu
• Scroll down to the ‘Capital Raises’ section and select the ‘Placements’ tab
• Tap ‘Explore hub’ to view all available Placements on Stake

To bid on a specific Placement:

• If there’s a Placement you’re interested in, tap to view more details, including the Term Sheet
• To place a bid, hit the green ‘Bid’ button at the bottom of the page
• Enter the number of shares you wish to buy, noting the minimum bid amount and your available buying power, then continue to confirm your bid

What happens after I bid on a placement?

After you’ve placed your bid, Stake will take care of the rest. You can find further information on how to bid here.

If you have any questions about your bid, please contact capital-raises@hellostake.com. 

Your AUD on Stake

When you submit a bid for an amount of IPO or Placement shares, Stake will place a hold for that amount from your AUD buying power – just like when you place a buy order for other stocks. This is to ensure you’ll have enough balance for settlement if your bid is successful.

How shares are allocated

Once bidding closes, Stake will let the Lead Manager (the broker assisting the company to issue its IPO or Placement shares) know how many shares Stake customers have bid for. The Lead Manager also receives other bids from outside of Stake. They will compare the total bids they receive to the amount the company was aiming to raise and give Stake an allocation of shares.

If there was a lot of demand for the shares and the IPO or Placement was oversubscribed (meaning the Lead Manager received more bids than the company was looking to raise) there will be a ‘scaleback’: Stake won’t be allocated the full amount of shares customers bid for. In this case, Stake aims to allocate each customer the minimum bid amount, and then use the remaining allocation to fill each customer’s bid by the same percentage. 

In the event that there is not enough allocation to cover all minimum bid amounts, Stake will allocate the minimum bid amount to each customer starting with the earliest bid, until the allocation is exhausted. This means that if an IPO or Placement is oversubscribed, you may not receive the full amount you bid for. Occasionally, the company will also cancel their plans to issue shares. Any amount you bid for that doesn’t get allocated will be returned to your AUD balance.

When the allocation has been finalised, Stake will send an email letting you know how many IPO or Placement shares you’ve secured. About a week before the shares get listed, you’ll be able to view them as holdings in your portfolio on Stake (although they won’t be available to trade until the listing date).

Stay updated

Depending on the deal, the process above usually takes several weeks for IPO shares, or several days for Placements. Stake will email you updates, including when you’ve been allocated shares, and when the shares start trading. You can also check your bids in progress in the ‘Active orders’ section of your Stake app. If you have any questions about your bid, you can contact Stake’s Capital Raises team by emailing capital-raises@hellostake.com.

How much does it cost to participate in an IPO or Placement?

For each deal, the Lead Manager or company issuing the shares sets a minimum bid amount. This is usually A$2,000 for an IPO bid and A$500 for a Placement bid.

Stake does not charge customers a brokerage fee to bid on IPO or Placement shares. Instead, in line with market convention, the Lead Manager typically pays Stake a commission, which equates to a small percentage of the amount of allocated bids. This commission is an additional amount paid by the Lead Manager to Stake, not charged to customers or taken out of customer bids.

Can I amend or cancel a pending bid?

When you submit a bid for IPO or Placement shares, you’re committing to buy those shares. If you want to delete a bid you’ve submitted, you must do this before bids close. This is because the allocation process starts as soon as bidding closes. Please note that the time and date for the closing of bids can be and often is brought forward by the company or lead manager at short notice.

To delete your bid before bidding closes:

• Open your Stake app
• Make sure you have ‘AUS’ selected in the top right of your screen
• Select ‘Portfolio’ from the bottom menu
• Select ‘Active orders’
• Under ‘Active bids’, select the bid you want to delete
• Tap the ‘Delete’ button and follow the prompts to confirm

If you wish to amend the amount of your bid, you’ll need to cancel your bid and place a new one with your amended bid, before the bidding closes.

If you have any questions please reach out to us at capital-raises@hellostake.com.