Can you ever trust this company again?

Atlantic Coal looks set for an acquisition following its placing of 1.6 billion new shares. But existing shareholders were snubbed in the offering, and quite rightly feel aggrieved. Tom Bulford examines the penny share miner.

Shareholders in Atlantic Coal (LON:ATC) should stand by for action. Yesterday, the company announced that it is looking to raise £12m by placing 1.6 billion new shares. And there is every chance that an acquisition will follow in short order.

Atlantic's shares have soared this year on the back of fears of a supply shortage in coal - the result of the floods in Australia. And they continued to rise as Atlantic reported successful efforts to boost production last year. With this new placing, Atlantic could also radically expand production, probably through acquiring another mine.

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Tom worked as a fund manager in the City of London and in Hong Kong for over 20 years. As a director with Schroder Investment Management International he was responsible for £2 billion of foreign clients' money, and launched what became Argentina's largest mutual fund. Now working from his home in Oxfordshire, Tom Bulford helps private investors with his premium tipping newsletter, Red Hot Biotech Alert.