A successful capital raising is dragging the Dubber share price lower on Tuesday.
The post Dubber (ASX:DUB) share price slides 7% after successful $110 million capital raising appeared first on The Motley Fool Australia. –
At the time of writing, the Dubber share price is down 6.56% to $2.99.
Why the Dubber share price is sliding lower on Tuesday
Dubber successfully raised approximately $110 million from institutional investors in Australia and overseas at a price of $2.95 per share.
The new shares were offered at a 7.8% discount to the last closing price of $3.20.
According to today’s announcement, the new shares will be issued in two tranches.
Tranche 1 will see 33 million shares settled on Friday, 30 July.
While Tranche 2 of 4.2 million shares will be issued subject to shareholder approval at a general meeting on Thursday, 2 September.
The size and discount of the capital raising is likely a factor weighing on the Dubber share price on Tuesday.
What did management say?
Dubber CEO Steve McGovern thanked the company’s shareholders and partners.
We have been gratified by the strong response to the placement, with existing and new investors supporting our vision.
McGovern also commented on the use of funds, saying:
Dubber has a very unique opportunity in front of it to not only become one of Australia’s leading technology companies, but a true global leader in our field. The success of this capital raising will allow us to significantly accelerate our growth objectives, advance M&A opportunities and continue developing Dubber to capture the substantial global opportunity ahead of us.
Despite the Dubber share price tumbling lower on Tuesday, the company has outlined ambitious plans to drive growth.
In the medium term, Dubber hopes to lift its annual recurring revenue from its current $39 million to $100 million.
Dubber outlined that “active opportunities in M&A expected to drive to conclusion in the coming two quarters”.
The company said that this would add to factors including like-for-like revenue, fast track Dubber product aspirations and product differentiation, and drive technology to increase subscription revenue through new functionality.
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Dubber Corporation. The Motley Fool Australia owns shares of and has recommended Dubber Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.