The Superloop Ltd (ASX: SLC) share price was trading 9% lower today. Put in context, over the past month, Superloop shares still 5% up.
For comparison, the S&P/ASX 200 (INDEXASX: XJO) has risen 3% in the same time.
What Does Superloop Do?
Superloop provides connectivity services within the Asia Pacific metro region. It operates a network of fibre and wireless assets in Australia, Hong Kong and Singapore and aims to benefit from the exponential growth in data consumption.
What’s Happened?
As Rask Media’s Luke Kennelly reported yesterday, “Superloop Capital Raising… Again – Where To From Here?“, the company plans to sell additional shares to investors and get more capital onto its balance sheet.
Superloop plans to raise $44 million from institutions (e.g. fund managers) and $35 million from retail investors (e.g. you and me) by offering shareholders one new share for every six (a 1-for-6 offer) they already own, at $0.82 a pop. The retail offer is non-renounceable.
In the following Rask Finance video I explain capital raisings and entitlement offers in great detail (tip: if you like the video, why not subscribe to our YouTube channel for the latest interviews, analysis and education – it’s free!):
Why Have Superloop Shares Fallen?
Basically, since the new Superloop shares are being offered at a steep discount (~18%) to Superloop share price before the announcement, investors are now reacting by sending the share price down towards the new price.
To learn more about the offer and consider whether or not it’s worth buying Superloop shares, I encourage you to read Luke’s comprehensive and free analysis on Rask Media by clicking here.
Alternatively, keep reading below to access one of our free investing reports on up-and-coming ASX shares.
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Don’t forget, Do you have a financial/commercial interest?
Disclosure: At the time of publishing, Owen does not have a financial interest in any of the companies mentioned.
