The Swoop Holdings Ltd (ASX: SWP) share price isn’t going anywhere on Thursday. This comes after the telecommunications company placed its shares in a trading halt before market open.
At the time of writing, Swoop shares are frozen at $2.09 apiece.
Why is Swoop in a trading halt?
The Swoop share price was placed in a trading halt this morning pending results in regards to a capital raise.
While no details have been given by the internet provider, several media outlets have indicated what’s happening behind the curtain.
According to the Australian Financial Review, Swoop is raising $40 million in an underwritten capital raise. It is believed fund managers received presentations by the company, detailing its intentions to support a number of acquisitions.
Should these deals be completed, it is estimated up to $15 million in additional earnings before interest, tax, depreciation and amortisation (EBITDA) would be added to Swoop.
The capital raise is likely to be offered at a discount of around 10% on the last closing price.
It’s worth noting the company has the backing of Fortescue Metals Group Limited (ASX: FMG) boss Andrew ‘Twiggy’ Forrest.
In addition, Airtasker Ltd (ASX: ART) chair James Spenceley also sits as an independent non-executive chair for Swoop.
Australia’s largest wealth management firm, Morgans is said to be the broker and underwriter of the capital raise.
Swoop advised its shares will remain in a trading halt until the release of the announcement or by 18 October, whichever comes first.
About the Swoop share price
Since the company’s listing in May 2021, the Swoop share price has accelerated by around 400% from its initial public offering price of 50 cents. Its shares reached a high of $2.46 in September before slightly pulling back.
Swoop has a market capitalisation of roughly $238.73 million, with approximately 171.18 million shares on its books.
Should you invest $1,000 in Swoop right now?
Before you consider Swoop, 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 Swoop 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
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. 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.
from The Motley Fool Australia https://ift.tt/3FUkWBQ