The Zip Co Ltd (ASX: Z1P) share price has started the week in the red.
In morning trade the payments company’s shares are trading 3.5% lower at $3.78.
This follows the successful completion of its placement to institutional, sophisticated, and professional investors.
What did Zip Co raise?
This morning Zip Co announced that it has received firm commitments to raise $60 million before costs via a placement of 16,216,216 ordinary shares.
This was $10 million more than the previously announced placement target of $50 million. Management explained that it decided to increase the placement size in response to significant investor demand.
These funds were raised at $3.70 per share. This represents a 5.6% discount to the last close price and a 4.7% discount to its 10-day volume weighted average price.
Zip’s Managing Director and CEO, Larry Diamond, was pleased with the outcome of the placement.
He said: “We are grateful for the support of many existing shareholders that participated in the successful Placement, together with a number of new shareholders that have joined our register, as we strive towards our mission of becoming the first payment choice everywhere and every day.”
“The additional equity capital will support the launch and growth of Zip’s UK operations, the roll-out of Zip Biz, increased investment in product, technology and data sciences as well as strengthening the Company’s balance sheet – helping us to continue delivering outstanding results for our shareholders,” he added.
Share purchase plan.
Zip Co will now push ahead with its share purchase plan to raise a further $10 million.
Eligible shareholders will be given the opportunity to subscribe for up to $27,000 of shares at the same price of $3.70 per share.
As with its placement, management advised that it may increase this cap and accept oversubscriptions. It may also scale back applications if it sees a need.
Also trading lower today is the Afterpay Touch Group Ltd (ASX: APT). Weekend media reports around surcharges being added to buy now pay later providers could be weighing on its shares today.
The post Zip Co share price lower after successful $60 million placement appeared first on Motley Fool Australia.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019