Why is the Weebit Nano share price frozen?

The Weebit Nano Ltd (ASX: WBT) share price has avoided the market weakness on Thursday.

That’s because the company requested a trading halt prior to the market open.

Why is the Weebit Nano share price frozen?

The Weebit Nano share price was slammed into a trading halt this morning after the company took advantage of a sensational rise over the last 12 months to launch an inevitable capital raising.

As you can see below, the semiconductor company’s shares have more than doubled over the last 12 months.

Though, as you can also see on that chart, Weebit Nano could have got so much more bang for its buck if it had launched this capital raising sooner. The Weebit Nano share price peaked at $9.03 earlier this month, whereas it closed the last session 38.5% lower than this level at $5.54.

It seems that some investors suspected that a capital raising was coming and sold off their shares.

Why is Weebit Nano raising capital?

The company has yet to reveal why it is raising capital, how much it is raising, and, importantly, at what price it is seeking to raise funds.

All we know at this stage, is that it is proposing a capital raising comprising an institutional placement and a share purchase plan.

Weebit Nano has requested that the trading halt remain in place until the earlier of the opening of trading on Friday or the completion of the institutional placement.

Interestingly, the company certainly isn’t short of cash. At the end of December, it was sitting on a cash balance of approximately $45 million. So, it will be interesting to see what it plans to do with the proceeds of this capital raising.

The post Why is the Weebit Nano share price frozen? 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.

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