Category: Stock Market

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Wednesday was a tumultuous day for stocks with ties to the cryptocurrency market. Leading digital tokens Bitcoin (CRYPTO: BTC) and Ethereum traded sideways, which usually indicates a calm market day for crypto stocks.

However, the initial public offering (IPO) of cryptocurrency exchange Coinbase Global (NASDAQ: COIN) drove many of the most volatile crypto stocks lower. Bitcoin-mining heavyweights Marathon Digital Holdings (NASDAQ: MARA) and Riot Blockchain (NASDAQ: RIOT) fell as much as 17.1% and 16.6%, respectively. Fellow crypto miner Bit Digital (NASDAQ: BTBT) started the day nearly 25% higher due to positive momentum from Bitcoin price increases in recent days but was trading 6.7% lower at 3 p.m. EDT. Even data-analytics company Microstrategy (NASDAQ: MSTR), which has invested its cash reserves in Bitcoin tokens, dropped as much as 12.5% lower.

So what

Why should Coinbase’s public offering trigger a wave of falling share prices among Bitcoin miners and others with a heavy interest in rising Bitcoin prices? After all, this event has been widely advertised as an important turning point in the history of cryptocurrencies as a legit investment class. A well-heeled Coinbase could act as a stabilizing force in this volatile market and help traditional investors find their way into this new idea.

The new stock surged more than 30% higher on day one, briefly touching a $100 billion market capitalization. This IPO checked all the boxes that were expected to support the generally positive pricing momentum for Bitcoin, Ethereum, and other leading crypto names. All of that should be good news for crypto miners and investors, too.

That stabilizing effect can be bad news for some of the highest fliers in the cryptocurrency market, though. Marathon’s stock has gained 9,600% over the last year, while Riot Blockchain soared 4,800% higher. Their massive gains were built around the idea of skyrocketing Bitcoin prices for the foreseeable future.

A Bitcoin market with more influence from steady hands like a well-funded Coinbase may be good for the cryptocurrency’s long-term value, but with less exciting gains in the near term. The same speculators who drove these stocks to the moon in recent months are reconsidering their tactics at this market crossroads.

Now what

Coinbase raised nearly $3 billion in Wednesday’s direct listing, bolstering a balance sheet that held just $4.9 billion of cash equivalents at the end of 2020. Most of that cash balance consisted of customers’ custodial funds, which limits what Coinbase can do with it. The IPO may turn out to be a game-changing moment in the market history of cryptocurrencies.

That should be an exciting thought for long-term investors who expect Bitcoin and other digital currencies to become a standard form of value storage, much like gold or government bonds are today. It could also be terrifying for short-sighted speculators who make their living on extreme volatility.

Personally, I’m starting to think of my modest cryptocurrency holdings as serious long-term investments. Coinbase didn’t drive me to that conclusion all by itself, but this IPO played a significant part in my thought process. You can take a deep dive into how the crypto market works before you make up your own mind.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Coinbase (NASDAQ:COIN) shares pop and drop in debut
• The Coinbase (NASDAQ:COIN) IPO price has been announced
• Bitcoin price hits new record high as Bitcoin ETF tops $1.3 billion
• The DigitalX (ASX:DCC) share price is up 30% this week
• What’s driving the Bitcoin price higher?

Anders Bylund owns shares of Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends MicroStrategy. 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.

The post Why Cryptocurrency stocks like Marathon Digital and Riot Blockchain crashed Today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Boral Limited (ASX: BLD) share price is bouncing around in early morning trade, currently up 0.3%.

Below, we take a look at the S&P/ASX 200 Index (ASX: XJO) listed building products and construction materials company’s latest market announcement.

What did Boral report this morning?

The Boral share price is edging higher after the company reported it is studying various options for its North American fly ash business. Those options include a potential joint venture (JV), strategic alliance, divestment to a third party or continued ownership

If you’re not familiar, fly ash is a byproduct of coal combustion. It’s mainly used to improve the durability of concrete.

Commenting on the plans for its North American fly ash business, Boral’s CEO Zlatko Todorcevski said:

We have conducted a detailed study of the US fly ash industry and remain confident in the long term demand dynamics for the industry, including significant incremental demand growth potential from the US government’s proposed new infrastructure program.

United State’s President Joe Biden has pledged to spend some US$2 trillion to revamp the US economy and upgrade the nation’s ageing infrastructure. That, as Todorcevski points out, will see a boost in the demand for concrete and fly ash.

Addressing the US shift to renewables and away from coal-fired power, Todorcevski continued:

New opportunities for supply exist from harvesting landfills, imports and natural pozzolans, which we expect will more than offset the decline in fresh fly ash supply as the US transitions away from coal fired power generation. As we continue to build our alternative supply strategy, strategic alliances and opportunities for partnership will be considered in parallel with divestment options or continued ownership.

The company said it has appointed advisors to assist with the study of its US fly ash business. It will provide an update when there is material progress or with its full year results in August, whichever comes sooner.

Earlier this month, on 1 April, the Boral share price got a big lift on a separate announcement related to its US businesses. That came after the company reported it had completed the sale of its 50% share in the USG Boral joint venture to Gebr Knauf KG for US$1.02 billion.

Boral share price snapshot

Boral shares have performed strongly over the past 12 months, up 120%. That compares to a gain of 28% on the ASX 200.

So far in 2021, the Boral share price is up 20%.

More reading

• Is the Afterpay (ASX:APT) share price set to surge later this month?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises above 7,000, Resolute Mining soars, Galaxy jumps
• Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)?
• 3 latest ASX shares that top brokers have upgraded to “buy” today

Motley Fool contributor Bernd Struben 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 Bruce Jackson.

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The Genex Power Ltd (ASX: GNX) share price is up today following news of the company’s Kidston Pumped Hydro Storage Project. Genex has secured all the financing it needs to go ahead with the project.

The Genex Power share price has had a poor month. At the time of writing, it’s down 14% since this time last month.

However, today’s news has given the Genex share price a much-needed boost. It’s currently up 2.5%, trading for 21 cents.

Let’s look closer at today’s news from the renewable energy developer.

Kidston hydro storage project funding

This morning, Genex announced it’s secured $660 million of financing to close contracts for its 250MW Kidston Pumped Hydro Storage Project.  

The final piece of the financing puzzle was the $3 million variation deed to the loan note subscription agreement it secured from the Clean Energy Finance Corporation.

Prior to that, Genex had received a $610 million debt facility from the Northern Australia Infrastructure Facility.

It also secured a $47 million project grant funding agreement from the Australian Renewable Energy Agency (ARENA), the McConnell Dowell Constructors Pty Ltd and John Holland Group Pty Ltd. Combined with the forgiveness of $9 million of convertible notes previously issued to ARENA by Genex.

In conjunction with Genex’s fully underwritten fundraising of $115 million in late March, the project is now fully funded.

Construction is set to commence this month.

More about the project

The Kidston Pumped Hydro Storage Project is a first-of-its-kind venture into hydro energy.

It is utilising the abandoned Kidston Gold Mine in Far North Queensland, making use of pre-existing mining accommodation and road access.

It will integrate Genex’s 270WM Kidston Solar Project.

The company claims it will be able to generate, store and dispatch renewable energy on demand during peak periods.

Commentary from management

Genex CEO James Harding welcomed the progress, saying:

I would sincerely like to thank our financiers NAIF, ARENA and the CEFC, together with the Queensland Government, for their continued and longstanding support of Genex and the project, without which the realisation of this iconic project would not be possible.

We look forward to updating the market when we commence construction at the Kidston site toward the end of this month.

Genex Power share price snapshot

The Genex Power share price is having a particularly volatile time on the ASX of late.

It’s up by 28% over the last 6 months, but down 6% year to date. It’s also up 57% over the last 12 months.

Genex has a market capitalisation of around $158 million, with approximately 1 billion shares outstanding.

More reading

• The ClearVue (ASX:CPV) share price is up 65% in a month. Here’s why
• Genex Power (ASX:GNX) can count Atlassian founders as major backers
• Genex (ASX:GNX) share price frozen on hydro project fund raising

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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April has witnessed a number of initial public offerings (IPOs) hit the ground running. As such the 92 Energy Ltd (ASX: 92E) share price will be on the radar when the company makes its ASX debut today.  

Newly listed shares such as Island Pharmaceuticals Ltd (ASX: ILA), Delorean Corporation Ltd (ASX: DEL) and Iceni Gold Ltd (ASX: ICL) all opened at least 45% higher than their initial listing prices. There is clearly an investor appetite for IPOs, which 92 Energy investors will be hoping bodes well for the company’s float today.  

Why the 92 Energy share price is in focus

92 Energy is scheduled to make its ASX debut at 1 pm AEST on Thursday after successfully raising $7 million at an offer price of 20 cents per share. This gives the company a market capitalisation of approximately $13.2 million. 

92 Energy is an Australian uranium exploration company searching for high-grade uranium in the Athabasca Basin, Saskatchewan, Canada. 

The company recently acquired significant databases of uranium exploration opportunities based in both Saskatchewan and Eastern Europe.

This led to the 100% purchase of Thunderbird Metals Pty Ltd, which holds information regarding uranium exploration opportunities in Saskatchewan, and European Resources Pty Ltd, which holds information for Eastern European opportunities.  

Relying on the information acquired from Thunderbird, the company entered into an agreement with IsoEnergy Ltd, holding a 100% legal and beneficial interest in a number of uranium mineral claims adjacent to IsoEnergy. 

Current projects

92 Energy currently has three projects that have the potential for unconformity-type uranium mineralisation, which the Athabasca Basin is renowned for. The basin is estimated to have produced around a quarter of the world’s uranium from 2016 to 2018. 

The Gemini Project is an early-stage uranium project located on the eastern margin of the Athabasca Basin, Saskatchewan, Canada. This project consists of six granted claims of which the company has 100% legal and beneficial interest in five. 

The company notes that most uranium exploration programs worldwide took place in the 1980s, but because of an oversupplied uranium market and low prices, there has been little activity in the area since. 

92 Energy believes there are considerable untested prospective areas with the potential to host unconformity-type uranium mineralisation. The use of modern geophysical methods and processing techniques will provide greater definition for the targeting of future drill holes.

The Tower Project is an early-stage uranium project also located on the eastern margin of the Athabasca Basin. The company considers its area to be underexplored with untested potential to host uranium mineralisation. Follow-up work is needed involving more detailed geophysics to define drilling targets. 

The Clover Project is located approximately 820 km northeast of Saskatoon. The company is looking to use the best available airborne magnetic data for mapping the basement rocks and important structures before drilling.

Could uranium demand drive the 92 Energy share price? 

Uranium fuels nuclear power generation which many believe has a critical role to play alongside renewables in a low carbon future.

Uranium prices were as high as ~US$130/lb around 2007 before diving to the mid US$20/lb mark between 2016 to 2019. This has resulted in a significant pullback in worldwide exploration and mine development. 

With that backdrop, Tim Gitzel, CEO of Cameco Corp the world’s largest publicly traded uranium company, commented: 

Growing demand for nuclear power means growing demand for uranium. However, on the supply side there are some big question marks about where uranium will come from to fuel the world’s growing demand for nuclear power due to years of persistently low prices that have led to planned production curtailments, lack of investment, the end of reserve life for some mines, shrinking secondary supplies, and trade policy issues, which are currently being amplified by unplanned disruptions due to the COVID-19 pandemic. These are the fundamentals that give us growing confidence the uranium market will undergo a transition similar to the conversion and enrichment markets.

More reading

• Here’s why the Genex Power (ASX:GNX) share price is up today
• Is the Afterpay (ASX:APT) share price set to surge later this month?
• Why the Ampol (ASX:ALD) share price is climbing
• Why the Race Oncology (ASX:RAC) share price is rocketing 10% higher
• GameStop looks to become debt-free with early debt retirement plan

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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All eyes are on the Zip Co Ltd (ASX: Z1P) share price but the Afterpay Ltd (ASX: APT) share price could soon be back in the spotlight.

Investors have been focused on the Zip share price after it released a better-than-expected update and move straight into a $400 million capital raise.

The Zip share price fell 1.4% to $9.48 this morning and Afterpay lost a similar amount to $126.12.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) shed 0.4% to fall to just under the psychologically important 7,000 mark.

Upcoming update puts Afterpay share price back in spotlight

But Afterpay could be back in focus when it releases its quarterly trading update. This update is due before the end of this month.

Like Zip, Afterpay could surge if the update beats expectations. While it’s hard to know precisely what the consensus forecast is, Morgan Stanley thinks it’s around what it is predicting.

What investors are expecting from Afterpay’s update

“We look for 14.8m active users (+76% YoY) and A$4.9bn GMV (+90% YoY) in APT’s March quarter (3Q21) update,” said the broker.

“While quarterly consensus is hard to gauge, our 2H21 forecasts are in line with consensus.

“Split by region, we expect A$2.1bn GMV for ANZ and A$2.4bn for the US. We expect 3.5m ANZ users vs 9.4m US users.”

If Afterpay can beat those numbers, it will almost certainly trigger a share price rally for the buy now play later group.

US growth the key focus

More specifically, the US figures could be the main one to watch. This is where Zip Co excited the market.

“APT’s US app downloads were particularly strong in the month of March at 760k, or 3x the amount of the prior year, and exceeded Dec 2020 levels (730k),” added Morgan Stanley.

“This will support future growth. US BNPL peers did not see an increase as large as APT in March.”

Talk about the weight of expectation!

What is the Afterpay share price worth?

But die-hard Afterpay supporters can take heart. Morgan Stanley doesn’t think Afterpay needs to beat expectations to look cheap.

The broker has an “overweight” recommendation on the Afterpay share price with a 12-month price target of $149 a share.

That leaves a more than 18% upside for the Afterpay share price.

More reading

• Strike Energy (ASX:STX) goes into trading halt for $80m cap raise
• Zip (ASX:Z1P) share price sinks lower after $400m notes offering
• Why the IOUpay (ASX:IOU) share price is up 15% this week
• Is the Klarna / Flybuys partnership the future for ASX BNPL providers?
• 5 things to watch on the ASX 200 on Thursday

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Is the Afterpay (ASX:APT) share price set to surge later this month? appeared first on The Motley Fool Australia.

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The Ampol Ltd (ASX: ALD) share price is climbing higher this morning after providing unaudited financials for the quarter ended 31 March 2021 (Q1 2021). At the time of writing, the Ampol share price was trading for $25.43, up 4.22%.

Why is the Ampol share price worth watching?

Ampol reported higher earnings before interest and tax (EBIT) numbers across its 3 major segments. Australian Fuels & Infrastructure (F&I) ex Lytton EBIT came in at $59 million, up from $47 million in both Q4 2020 and Q1 2020.

International F&I EBIT increased to $26 million, up from $18 million last quarter and $24 million in the year prior. That represents an 11% increase on prior corresponding period (pcp) as higher prices offset lower volumes. Lytton EBIT recorded losses of $4 million and $18 million in Q4 2020 and Q1 2020 respectively.

The Ampol share price is one to watch in early trade following this morning’s update. Overall F&I EBIT climbed to $85 million from $61 million last quarter and $53 million last year while convenience retail EBIT edged lower came in at $78 million. 

Convenience retail shop performance remains strong despite the impact of snap lockdowns. Ampol reported a positive response to the Ampol rebrand with 109 sites rebranded at the end of March.

Ampol’s Corporate segment posted a $13 million EBIT loss, the same as Q4 2020 and less than the $15 million figure last quarter. Replacement cost of sales operating profit (RCOP) EBIT excluding significant items edged higher on the back of strong segment results.

The Ampol share price has jumped out of the blocks early this morning as strong earnings flowed through to the bottom line.

RCOP EBIT totalled $150 million for the quarter, up from $142 million in Q1 2020 and $122 million last quarter. Group Historic Cost Operating Profit (HCOP) net profit after tax totalled $175 million, up from $12 million in Q4 2020 and a $29 million loss in Q1 2020.

Foolish takeaway

The Ampol share price is climbing higher as investors react well to the latest numbers. Notably, crude oil prices continued to rebound last quarter as the recovery from the coronavirus pandemic continues. 

More reading

• The Ampol (ASX:ALD) share price is up 6% as its chair gets on board

Motley Fool contributor Ken Hall 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 Bruce Jackson.

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The Race Oncology Ltd (ASX: RAC) share price has been a very strong performer on Thursday.

In morning trade, the precision oncology company’s shares are up 10% to $3.38.

Why is the Race Oncology share price storming higher?

Investors have been buying the company’s shares following the release of a positive announcement this morning.

That announcement revealed details of a recent scientific publication in the prestigious journal Nature Communication.

According to the release, the publication confirms that its phase 2/3 cancer drug Bisantrene is a highly effective inhibitor of the Fat Mass and Obesity associated protein (FTO).

The release notes that the independent work was performed by a research team at the University of Chicago led by prominent Professors Chuan He and Yu-Ying He. It builds on the original identification of Bisantrene as a potent FTO inhibitor by Professor Chen and his team at the City of Hope Hospital in 2020.

In addition, the University of Chicago team has identified that FTO plays a critical role in the development of skin cancers caused by low-level arsenic exposure and that Bisantrene-targeted inhibition of FTO limits the growth of these skin cancers in both cell culture and mice.

Management commentary

Race Oncology’s Chief Scientific Officer, Dr Daniel Tillett, said: “The independent confirmation that Bisantrene is able to target FTO and treat skin cancer by such a distinguished team is of great importance. Many scientists and pharmaceutical companies are sceptical of potential cancer breakthroughs until they have been replicated by an independent group of researchers. This new paper repeating the earlier FTO work of the City of Hope Hospital is a major step forward for our clinical plans for Bisantrene.”

Following today’s gain, the Race Oncology share price is now up an impressive 73% since the start of the year. This extends its staggering 12-month gain to over 1,000%.

More reading

• Why Computershare, Macquarie, Race Oncology, & Webjet are tumbling lower
• Race (ASX:RAC) share price falters despite positive update
• Up 1,460% in a year, why the Race Oncology (ASX:RAC) share price is sliding today
• Race Oncology (ASX:RAC) share price slides on a new melanoma preclinical study

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

The post Why the Race Oncology (ASX:RAC) share price is rocketing 10% higher appeared first on The Motley Fool Australia.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

GameStop (NYSE: GME) ended 2020 with $216 million in long-term debt. But under an early redemption notice announced yesterday, the video game retailer said it will be retiring the notes at the end of the month.

That will leave GameStop debt-free and able to focus its resources on transforming into a primarily e-commerce driven retailer.

GameStop said it was voluntarily issuing an irrevocable notice of redemption on April 30 for $216.4 million of its 10% senior notes that were due in 2023. It will use its cash on hand to pay off the debt.

While GameStop’s fiscal 2020 year ended at the end of January with almost $509 million in cash and equivalents in the bank, earlier this month it increased the size of a share offering to 3.5 million shares at market prices. At its current stock price of $145 a share, the video game retailer would realize about $508 million.

The at-the-market (ATM) offering, though, is an expanded version of a $100 million ATM program it announced in December. At the time, GameStop stock was trading just under $17 a stub.

Of course, in January was the massive Reddit rally caused GameStop shares to surge, but the retailer failed to act on grabbing more cash from its elevated stock price. Considering shares remain inflated, the expanded offering gives it the chance to raise cash, pay off its debt, and still have plenty of money left over to finance its transformation.

Activist investor Ryan Cohen is firmly in charge of GameStop now. He was named chairman of the board, almost all serving directors will be stepping down, and the video game stock is looking for a new CEO. He’ll now be able to effect the change he seeks unencumbered by debt.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Tesla and Palantir were some of the most popular US shares last week
• Better buy: Amazon vs. GameStop
• GameStop names activist investor Ryan Cohen as chairman of the board
• Will a retreating Reddit army trample the IOUpay (ASX:IOU) share price?
• Tesla and GameStop were some of the most popular US shares last week

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Strike Energy Ltd (ASX: STX) share price has gone into a trading halt as the company undertakes an $80 million capital raising.

Management is capitalising on the high Strike Energy share price to get the cash injection to fund what it considers to be “transformational” outcomes in Western Australia.

The Strike Energy share price surged nearly 189% over the past year and last traded at 38 cents.

Strike Energy cap raise at big discount

But the new share sale is being priced at a relatively big 26.7% discount to the last traded price to tempt institutional investors to tip in $75 million into the capital raise via a placement.

The emerging gas producer is aiming to secure the balance via a share purchase plan that is also priced at 30 cents a pop.

Cap raise to draw first gas from West Erregulla

A chunk of the proceeds will be used to develop and deliver “first gas” from its West Erregulla project.

Phase 1 of the project is expected to produce 80 Terajoules a day. Final investment decision (FID) for West Erregulla, which is 50% owned by Strike Energy, is expected by middle of this calendar year.

If things go to plan, first gas from the project could come as soon as end of 2022, if not the first half of 2023.

Other uses for the funds

Management also plans to use the new cash to prove up the South Erregulla gas resource and to appraise the Perth Basin wet-gas Jurassic play at Walyering.

Those participating in the cap raise will also be helping Strike Energy reach its pre-FID milestones for Project Haber and to develop its geothermal projects.

Coincidentally, the federal government is looking to use gas to fire up Australian manufacturing, although the plan has attracted controversy.

More ASX shares raising capital

Strike Energy isn’t alone is tapping shareholders on the shoulder for cash. The Zip Co Ltd (ASX: Z1P) share price fell 2.7% this morning to $9.35 after it raised $400 million via a “zero coupon” senior convertible note offering.

Zero coupon means Zip Co doesn’t pay any interest on the note. Investors who participated in the raise are banking on a further sharp rise in the Zip share price when they convert the notes to shares at a fixed price of $12.39 before the note matures in 2028.

Strike Energy and Zip Co won’t be the last to raise capital in this market. Investor appetite is strong and ASX shares remain very well supported despite worries about overstretched valuations.

As mentioned in a previous article, I am also expecting more miners to be passing the cup around, including Galaxy Resources Limited (ASX: GXY).

More reading

• Zip (ASX:Z1P) share price sinks lower after $400m notes offering
• Why the IOUpay (ASX:IOU) share price is up 15% this week
• Is the Klarna / Flybuys partnership the future for ASX BNPL providers?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises above 7,000, Resolute Mining soars, Galaxy jumps

Brendon Lau owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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.

The post Strike Energy (ASX:STX) goes into trading halt for $80m cap raise appeared first on The Motley Fool Australia.

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The Regis Resources Limited (ASX: RRL) share price has returned from its trading halt and is crashing notably lower.

In early trade, the gold miner’s shares are down 17% to a 52-week low of $2.61.

Why was the Regis share price in a trading halt?

The Regis Resources share price was placed in a trading halt this week while it launched an equity raising.

The company launched the equity raising after signing a conditional binding agreement with IGO Ltd (ASX: IGO) to acquire its 30% interest in the Tropicana Gold Project for A$903 million.

This morning Regis Resources announced the successful completion of its institutional placement and the institutional component of its fully underwritten entitlement offer.

According to the release, the placement and the institutional component of the entitlement offer raised a total of approximately A$494 million at $2.70 per new share. This represents a 14.8% discount to its last close price.

Regis Resources revealed that it received strong demand for its placement and the entitlement offer was well supported. The latter had a take-up rate from eligible institutional shareholders of approximately 86%.

Regis will now seek to raise approximately A$156 million from the fully underwritten retail component of the entitlement offer. This will be undertaken at the same price, which is actually higher than the current Regis share price.

“Transformational transaction”

Regis’ Managing Director and CEO, Jim Beyer, commented: “As noted in Regis’ ASX announcement on 13 April 2021, the proposed acquisition of a 30% in the Tropicana Gold Project is a transformational transaction for Regis, and we are very pleased with the strong demand and the support from new institutional investors and existing institutional shareholders which we see as reflecting the strong support for the transaction.”

The company notes that Tropicana is a low cost, high margin, top five producing Australian open-pit and underground gold mine located in the Albany-Fraser Orogeny in Western Australia.

It is one of the largest gold mines in Australia with gold production of 463koz in FY 2020 and guidance of 380koz – 430koz in FY 2021. It diversifies Regis’ existing production base and comes with a world class joint venture partner in AngloGold Ashanti.

However, judging by the performance of the Regis share price today, the market doesn’t appear convinced by the move.

More reading

• Top fundie picks this ASX 200 resource share for the EV revolution
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• ASX 200 flat: Zip rockets, Cleanaway higher, Regis-IGO announce Tropicana deal
• Why IGO, Orocobre, Splitit, & Zip shares are charging higher
• Regis Resources (ASX:RRL) announces $900m Tropicana Gold Project acquisition

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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