Insights

Why the Red 5 (ASX:RED) share price is crashing 16% lower today

The Red 5 Limited (ASX:RED) share price is crashing lower on Friday after announcing the completion of the institutional component of its equity raising…
The post Why the Red 5 (ASX:RED) share price is crashing 16% lower today appeared first on The Motley Fool Australia. –

asx share price fall represented by investor with head in hands

The Red 5 Limited (ASX: RED) share price has been one of the worst performers on the Australian share market on Friday.

In afternoon trade the gold miner’s shares are down 16% to 16 cents.

This latest decline means the Red 5 share price is down a disappointing 38% since the start of the year.

Why is the Red 5 share price crashing lower today?

Investors have been selling Red 5’s shares on Friday after it announced the completion of a $39 million institutional placement and entitlement offer.

Red 5 raised the funds via a 4-for-21 fully underwritten accelerated non renounceable entitlement offer that saw the company issue approximately 245 million shares at a 16% discount of 16 cents per new share.

Following its completion, the company will now push ahead with the retail component of the equity raising. This is seeking to raise a further $21 million at the same price.

Petra Capital and Canaccord Genuity are acting as Joint Lead Managers, Joint Bookrunners, and Joint Underwriters of the Entitlement Offer.

Why is Red 5 raising funds?

According to the release, proceeds from the entitlement offer will be applied to King of the Hills (KOTH) development, drilling and development programs at the Darlot Gold Mine, and general working capital.

Red 5’s Managing Director, Mark Williams, commented: “The launch of the fully underwritten capital raising this week marked a critical step in Red 5’s development strategy, providing the balance of funding for the KOTH project.”

“We are delighted with the support received from our existing institutional investors. The Entitlement Offer is also available for our retail shareholders to ensure that all Red 5 shareholders are given the opportunity to participate in the funding of the KOTH Project.”

“The strong outcome reflects the market’s confidence in our growth pathway, which will see Red 5 evolve into a multi-asset, mid-tier gold producer in the near future,” he concluded.

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 James Mickleboro 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 the Red 5 (ASX:RED) share price is crashing 16% lower 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!