The Zip Co Ltd (ASX: Z1P) share price is edging lower today as the company prepares to close its share purchase plan (SPP) tomorrow.
At the time of writing, the buy-now pay-later (BNPL) provider’s shares are travelling 2.93% lower to $1.49.
All the important details regarding the SPP
Earlier this month, Zip announced that it opened its SPP to eligible shareholders after successfully completing a $148.7 million institutional placement.
The SPP offers shareholders who were on the company’s register at the end of 25 February to subscribe for new shares.
Each retail shareholder can apply for up to $30,000 worth of new Zip shares without incurring brokerage or other transaction costs.
The issue price listed under the SPP is almost certain to be a 2% discount to the volume weighted average price for the five trading days up to Friday 1 April 2022.
In contrast, the institutional placement saw institutional, sophisticated and professional investors pick up Zip shares for $1.90 apiece.
The company is seeking to raise an additional $50 million under the SPP to help Zip strengthen its balance sheet.
In addition, management is looking to inject more capital runway to execute on the potential synergies from the upcoming transaction. This relates to the $491 million all-scrip acquisition of Sezzle Inc (ASX: SZL).
Whether the SPP will successfully raise $50 million is anyone’s guess. The company’s shares have continued to decline over the past year, which may scare away shareholders from investing more money.
The SPP has been open from 11 March and will close tomorrow 1 April.
Zip is expected to release the announcement of the results next Wednesday 6 April.
Zip share price summary
It has been a whirlwind year for Zip investors, losing almost 80% in value.
The company’s shares rocketed to a 52-week high of $10.61 in April 2021, before quickly plummeting throughout the year.
When comparing this to the S&P/ASX All Technology Index (ASX: XTX), the index has lost 3% over the same time frame.
Zip commands a market capitalisation of around $1 billion and has more than 669.06 million shares on its registry.
The post The Zip share purchase plan closes tomorrow. Here’s what you need to know appeared first on The Motley Fool Australia.
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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. owns and has recommended ZIPCOLTD FPO. 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.
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