The Afterpay Touch Group Ltd (ASX: APT) share price has jumped 7% after finalising its capital raising.
Afterpay Touch is the owner of the popular “buy now, pay later” app. As of early 2019, Afterpay had over 4 million registered users worldwide, making it one of Australia’s true technology success stories.
Afterpay’s Successful Capital Raising
The buy now, pay later company announced that it successfully raised $317.2 million via a fully underwritten institutional share placement which was strongly supported by existing as well as new shareholders.
The capital raising price was at $23 per share, which was at the top end of the price range. That means it issued an additional 13.8 million shares. This means the new shares were only issued at a 4.8% discount to the 7 June 2019 closing price.
Afterpay non-executive director Elana Rubin said: “We are pleased by the strong investor support shown in the capital raising for the Afterpay business and our global growth strategy as outlined in our previously announced mid-term plan. The Placement was oversubscribed, and we are also pleased to welcome several new high-quality institutions onto our register.”
Management Sell-Down
Afterpay also confirmed that Anthony Eisen, Nicholas Molnar and David Hancock have sold 2.05 million, 2.05 million and 0.4 million shares respectively to Tiger Management and Woodson Capital at the placement price of $23 per share. They’re all about to bank a lot of cash into the bank!
Share Purchase Plan (SPP)
Regular shareholders will now have the opportunity to buy Afterpay shares at either $23 or the 5-day average up to the SPP date.
The SPP is aiming to raise approximately $30 million from retail shareholders. Each person can invest up to $15,000 each.
Is Afterpay A Buy?
With the share price up 7% in early trade, I think the short term opportunity to buy shares was over the past week or two. I still think it looks expensive at the current price and it isn’t close to generating a net profit yet, unlike some either tech shares. Plus, Afterpay faces growing competition.
With the above in mind, that’s why I think the rapid ASX growth shares in the free report below could be better investment options as they are closer to sustainable profit.
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