The All Ordinaries Index (ASX: XAO) is having a decent day so far this Wednesday. At the time of writing, the All Ords has gained a healthy 0.42%, putting the index up at around 7,420 points. But it's another story when it comes to the Arafura Rare Earths Ltd (ASX: ARU) share price.
Arafura shares are on fire today. This All Ords rare earths company has rocketed a whopping 13.48% so far this Wednesday, putting the company at 50 cents a share.
So what on earth is causing this company to shoot up so dramatically during this Wednesday's trading session?
Well, it seems that confirmation of Gina Rinehart's budding ambitions over Arafura might be responsible. Despite the fact Rinehart's interest in Arafura was already publicly known, an update provided by the miner last night seems to be boosting investor sentiment today.
Last night, after market close, Arafura released a new ASX filing. This was a 'becoming a substantial holder' declaration, and it related to Gina Rinehart.
Image source: Getty Images
Arafura share price soars as Rinehart shows her cards
Rinehart, through her company Hancock Prospecting, already owned a significant chunk of Arafura. But we've just had confirmation she has gone on another buying spree.
This purchase was the likely result of Hancock's participation in the recently completed share purchase plan that Arafura has run.
As we reported earlier this month, Arafura announced the $121 million capital raise on 5 December. This enabled institutional investors to pick up additional shares at a price of 37 cents each. Hancock Prospecting initially put forward $60 million for this placement, but it seems that only $43.37 million was accepted.
Rinehart, through Hancock Prospecting, forked out $43.37 million on Arafura shares on 12 December, netting the company just over 117.22 million shares.
ASX filings show that Hancock has spent most of 2022 building up a stake in Arafura.
The private company began buying in April, but slowly. Hancock made six purchases over April, netting one to two million new shares with each tranche.
This was continued over early May as well. With yet another purchase in August, this one worth around $9 million, Hancock owned approximately 49 million shares prior to this Monday.
But on Monday, Hancock Prospecting had more than tripled its stake in Arafura with its whopping $43.37 million buy. This latest purchase gives Hancock Prospecting just over 166 million shares in Arafura, with around 8.37% voting power in the company.
Even so, it appears investors have been buoyed today by news of Rinehart's investment in Arafura. Gina Rinehart isn't Australia's richest person for nothing, so it's not hard to see why investors might be feeling optimistic over the Arafura share price today.
