Insights

Why is the Candy Club (ASX:CLB) share price falling today?

The Candy Club share price is falling today after the company raised $20 million via private placement and debt financing.
The post Why is the Candy Club (ASX:CLB) share price falling today? appeared first on The Motley Fool Australia. –

A hand moves a building block from green arrow to red, indicating negative interest rates

The Candy Club Holdings Ltd (ASX: CLB) share price is falling today after the company raised $20 million via private placement and debt financing. At the time of writing, the Candy Club share price is trading at 23 cents per share.

Candy Club is a confectionary retailer. The business primarily engaged in both business-to-consumer (B2C) and business-to-business (B2B) markets. Candy Club is established in the US market, however, it also has an Australian presence.

Under its B2C business, the company sells subscriptions plans for its Candy Boxes in the USA. Furthermore, the B2B business involves the selling of Candy Club branded confectionery to specialty market resellers in the USA. 

Why is Candy Club raising the capital?

Candy Club’s announcement today is regarding the successful completion of an institutional placement. This comes from the issue of 48.6 million fully paid ordinary shares at 22 cents per share to raise approximately $10.7 million before costs.

Candy Club’s wholly-owned US subsidiary, Candy Club Holdings Inc., has also secured US$7.5 million (A$9.84 million) in debt funding. This comes from Venture Lending & Leasing IX Inc. who is a part of a leading Silicon Valley equity/debt venture firm called Western Technology Investment (WTI). 

Candy Club says the capital raised is “to be invested in considerably scaling the business”. The funds raised under the placement will be used for:

  • Acquisition of Inventory – $4.4m
  • Customer Acquisition Lead Generation campaigns – $1m
  • CAPEX – $500k
  • Increased Sales Staff – $500k
  • General Working Capital – $3.8m
  • Costs of the offer – $500k

What Candy Club management said

Candy Club chair James Baillieu explained the debt and placement combination: 

By bundling the WTI debt deal with the placement, we substantially reduced the amount of shareholder dilution to reach our new capital target, as well as raising from institutions and sophisticated investors a large amount of equity successfully at only a small discount to market price.

Candy Club share price snapshot

The Candy Club share price losses today are part of a broader trend. Furthermore, the company’s share price has declined by 12% this month.

However, this comes against large gains over the past 12 months. Candy Club’s share price has risen 528% in that timeframe, beating the consumer defensive sector by 525%.

It’s also up 67% in 2021 so far.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why is the Candy Club (ASX:CLB) share price falling today? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!