Close menu

May 20th, 2022 | 11:35 CEST

Capital increase? What you need to know! TUI, Triumph Gold, Steinhoff

  • Investments
Photo credits:

To be successful as a company, you need not only motivated employees, functioning machines and brilliant ideas, but also capital. Investments are the cornerstone for growth and success on the stock market. But why are companies that raise "fresh money" on the market regularly punished? Is it possibly related to communication and how the funds are used? We take a closer look at three stocks.

time to read: 3 minutes | Author: Nico Popp
ISIN: TUI AG NA O.N. | DE000TUAG000 , TRIUMPH GOLD CORP. | CA8968121043 , STEINHOFF INT.HLDG.EO-_50 | NL0011375019

Table of contents:

    Terry Lynch, CEO, Power Nickel Inc.
    "[...] Having Investors like Robert Friedland and Rob McEwen come in with CVMR and Terra Capital really was terrific. [...]" Terry Lynch, CEO, Power Nickel Inc.

    Full interview


    TUI: Salami tactics displease the market

    TUI's share price has recently taken a significant hit. The reason is a capital increase with the purpose of repaying the state aid provided during the pandemic. Lufthansa took a similar step months ago. At the time, however, the market interpreted the measure as a signal of strength. Finally, being independent again and taking off. Things look different at TUI at the moment. Perhaps this is because the travel group is not entirely paying off its state aid. Also, the capital increase is already the third step of this kind since 2021. At this point, the transaction has a "whiff of scandal" to it.

    If a capital increase does not exceed the 10% mark of the share capital, the Company can waive subscription rights for existing shareholders. These subscription rights ensure that the ownership structure can remain the same after a capital increase or that existing shareholders can at least sell their subscription rights and, in this way, receive compensation for the dilution. TUI has a major Russian investor on board who is now on the EU sanctions list, so a large capital increase with subscription rights was not possible. On the one hand, the current salami tactics mean that a liberating blow for TUI is not forthcoming and that shareholders' stakes are being diluted - after all, new shares are coming onto the market. TUI is heading for below EUR 2.

    Triumph Gold: Step by step to success

    Capital increases are also an issue for investors in the commodity market. The earlier a company is in its development stage, the more likely it is to rely on such measures. Instead, major investors and strategic partners are rewarded with warrants that allow them to buy additional shares in return for a payment that is usually higher than the current share price. That injects capital into companies' coffers on the commodities market twice over, enabling them to continue on their growth path. However, if the market as a whole falters and prices appear to be cemented, there can also be pressure on the share after capital increases. That is what happened with Triumph Gold in recent months.

    The Company was able to provide itself with sufficient capital in 2020 at the peak of the gold bull market - the price of the new shares was CAD 0.20 at that time. A warrant was granted at CAD 0.30 on a three-year view. In the meantime, the share price is more than 50% lower. Many investors from the capital increase are likely to have parted with the value and only hold the warrants. From today's perspective, it seems unlikely that these will run into the money, but investors must consider how quickly things can sometimes move on the capital market. In 2020, the value went from CAD 0.11 to CAD 0.28 within four months. Since Triumph Gold has drilled successfully in recent years and even discovered an entirely new zone of mineralization recently, the stock should be on some investors' minds. If the market turns around like in 2020, the hard work of the past years could be a cornerstone for a positive development of the share. Currently, risk also seems to be priced in because of possible financing rounds. But opportunities can also arise from this. Triumph is a case for the watch list.

    Steinhoff: Saved, but at what price?

    The example of Steinhoff shows that it is sometimes more complicated to have funds than to need them. The ailing furniture group from South Africa argued with creditors for years. During this phase, there was some restructuring. The result: countless bonds under various conditions. Although the measures ensured the Company's survival years ago, the financial situation still weighs on the stock today. Coupled with legal disputes, this is not a convincing investment story.

    When companies need capital, the market takes notice. What weighs on the share price most is uncertainty or capital measures without meaningful investments. TUI's salami tactics, which have the sole purpose of paying off the state, are an example of this. Things are different for emerging mining companies like Triumph Gold. Here, investors know that capital is going into work on a promising property in Canada's Yukon. The Company's steady work over the past few years can pay dividends, especially during challenging market periods. Frugality is not infrequently rewarded.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.

    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

    Related comments:

    Commented by André Will-Laudien on November 20th, 2023 | 07:10 CET

    Furious debt mania, a thorough portfolio check is necessary! Allianz, Blackrock Silver, Deutsche Bank and Commerzbank in focus!

    • Mining
    • Silver
    • Gold
    • Investments
    • Banking
    • Debt

    From one high to the next - it is not just equities that are booming in Europe, the US and China; it is mainly debt. First Corona, then Ukraine, now Israel - there is no end to the flood of borrowing. Armaments are now being financed on credit, while the accompanying recession is draining the coffers. Real estate is becoming a hot topic: New builds are hardly affordable for families, and old buildings are swallowing up thousands of euros in green-tinted renovation costs. The Federal Constitutional Court has now put a retroactive stop to the creative spending culture in Berlin, and a new budget plan is necessary. Keeping a clear head as an investor in this environment is challenging. We look at the opportunities in the financial sector, but perhaps precious metals will also be the anchor that saves the day.


    Commented by Stefan Feulner on November 14th, 2023 | 07:00 CET

    Business against climate change is booming - Allianz SE, Klimat X, Nio

    • insurance
    • Investments
    • Sustainability
    • renewableenergies

    Climate change is increasingly threatening our lives, with few areas worldwide considered safe. Sea levels are rising, and polar ice is melting. Many regions are experiencing severe storms and increased rainfall, while others face growing risks of heatwaves and droughts. Since the Paris Climate Agreement at the latest, countries have been stepping up their efforts to limit global warming to 1.5 degrees Celsius. This has created a market that experts predict will increase eightfold by the end of the decade.


    Commented by Armin Schulz on November 8th, 2023 | 07:30 CET

    Deutsche Bank, Globex Mining, Barrick Gold - Enthusiasm for gold is back

    • Mining
    • Gold
    • Investments
    • Vanadium

    Despite several interest rate hikes, the price of gold has recently risen to over USD 2,000 again. Even though the latest increase coincided with the attack on Israel, this is unlikely to be the reason for it. Instead, the high demand from central banks is responsible for the steady gold price. Within the first 9 months, the central banks bought a whopping 800 tons of gold. That is a new record. The geopolitical tensions could also turn more and more private individuals into so-called gold bugs, who are making provisions for crises and assuming that gold will continue to rise in the long term. As the Fed has paused interest rates, this could give the gold price a further boost.