Weebit Nano Ltd (ASX: WBT) shares are under pressure on Friday.
In early trade, the ASX tech stock is down 15% to $3.88.
Why is this ASX tech stock falling today?
The semiconductor company’s shares are falling today in response to broad market weakness and the completion of a capital raising.
According to the release, Weebit Nano has successfully completed a fully underwritten $80 million institutional placement, alongside an additional $7 million placement to investors in Israel.
In total, the company is issuing approximately 21.5 million new shares, representing around 9.4% of its existing shares on issue.
The ASX tech stock revealed that the new shares were issued at $4.05 each, which represents a 10.8% discount to the company’s last closing price.
Share purchase plan to follow
In addition to the placement, the company also announced plans for a share purchase plan (SPP) to raise up to $15 million from eligible retail investors.
The SPP will be offered at the same issue price of $4.05 per new share, allowing existing shareholders the opportunity to participate in the capital raising without brokerage costs.
Why is it raising funds?
Weebit Nano revealed that the proceeds from the raising will be used to accelerate its strategy of becoming a leading provider of ReRAM memory technology.
Commenting on the raise, Weebit Nano’s CEO, Coby Hanoch, said:
This is a strategic capital raise for Weebit Nano. It significantly strengthens our balance sheet, enabling us to accelerate development and commercial activities to ensure our ReRAM is the clear leader at a time when the industry is moving to adopt ReRAM in next-generation technologies. As the market’s only independent provider of qualified ReRAM, we have the first mover advantage. Still, scaling our R&D activity is essential to continuously improving the technology and solidifying our leadership position for many years to come.
Our recent licensing agreement with leading semiconductor vendor Texas Instruments, following the deals with onsemi and DB HiTek, has reinforced the market perception that ReRAM is the successor to embedded flash, and we are continuing to progress technical evaluations and commercial negotiations with many of the world’s leading foundries, IDMs and product companies. We also see clear opportunities to expand our offering, addressing genuine memory needs for AI in-memory compute (IMC) applications as well as within the discrete memory chip domain, among others. This Placement enables us to strengthen our newly formed System and AI team.
Despite today’s weakness, Weebit Nano shares are up approximately 90% since this time last year from $2.06.
The post Why are Weebit Nano shares crashing 15% today? appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.