Why the Veem (ASX:VEE) share price is sinking 11% today

The company’s shares are continuing to slide…
The post Why the Veem (ASX:VEE) share price is sinking 11% today appeared first on The Motley Fool Australia. –

The Veem Ltd (ASX: VEE) share price is in freefall today following the company’s update on its capital raise.

During early afternoon trade, the marine technology company’s shares are down a sizeable 11.51% to $1.23. This means that since 3 September, its share price has lost close to 15%, hitting early August lows.

Veem completes capital raise

A catalyst to the falling Veem share price could be new shares coming onto the company’s registry.

According to the company announcement, Veem advised it has successfully raised $6 million before costs by a way of placement.

The offer received strong support from both institutional and sophisticated investors, subscribing for 5.1 million shares at $1.18 apiece. This represents a 15.1% discount to the last traded price on 8 September and a 10.3% discount to the 15-day volume-weighted average price.

Concurrent with the placement and investor demand, the company’s founders, the Miocevich family, have offloaded 11.9 million shares. The partial sell-down is expected to improve liquidity and the free float of Veem shares in the market.

Once the transaction is fulfilled, the Miocevich family will hold a controlling 50.4% interest in the company. No intention has been stated to sell any more shares in the near-term future.

In addition to the placement, Veem announced it will open a Share Purchase Plan (SPP) on 22 September. The pricing terms will be the same as the placement, with the intention to raise approximately a further $2 million.

Both proceeds will be directed towards a number of initiatives. These include funding research and development, sales and marketing to drive gyro sales growth and working capital.

Veem chair Brad Miocevich commented:

We are particularly excited about the very high demand from investors leading to a successful capital raising which will allow us to further invest in the gyrostabilizer business which is at the leading edge of the industry. The market is significant and over the past few years we have truly started to become recognised as the global leader. We now have the opportunity to ensure we deliver on this mission as well as the broader base of the business.

About the Veem share price

Over the last 12 months, Veem shares have climbed by more than 166% and, year-to-date, are up 51%. Despite today’s drop, the company’s shares have gradually increased over the long term to provide fruitful returns for investors.

Veem presides a market capitalisation of roughly $161 million and has 130 million shares on its registry.

The post Why the Veem (ASX:VEE) share price is sinking 11% today appeared first on The Motley Fool Australia.

Should you invest $1,000 in Veem right now?

Before you consider Veem, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Veem wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

The Australian Strategic Materials (ASX:ASM) share price is sliding 7% on Monday
Deep Yellow (ASX:DYL) share price surges 24% to record highs
Job losses, but the RBA remains confident. Scott Phillips on Weekend Sunrise

Sydney Airport share price soars 5% on latest takeover news

ASX uranium shares are booming double digits across the board on Monday. Here’s why.

Motley Fool contributor Aaron Teboneras 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.

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!