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The Auscann Group Holdings Ltd (ASX: AC8) share price has been on the move today following the sale of its DayaCann holdings.

When the news broke, shares in the cannabinoid pharmaceutical company rose to 15 cents, however they have since retreated.

At the time of writing, the Auscann share price is marginally higher at 14.2 cents, up 1.4%. This compares to the All Ordinaires Index (ASX: XAO) which is up 0.6% to 6,557 points.

So, let’s see why Auscann sold off its stake in DayaCann.

Sale of joint venture interest

According to the release, Auscann advised that it has entered a sale agreement with GrowForChile SpA (GFC) and Telor International Limited. The offloading of its 50% interest in its Chilean joint venture, DayaCann SpA, will see Auscann focus on its core business interests.

The deal will involve the transfer of the company’s loan with DayaCann to GFC. In addition, Auscann will receive an upfront payment of US$200,000 and further payments that amount to US$1.5 million.

Auscann formed an evenly split joint venture with Fundación Daya in Chile in November 2016. The goal was to cultivate and supply global markets with cost-effective medicinal cannabis.

Today, DayaCann is the only commercial-scale medical cannabis company in Chile that has obtained production licences to grow multiple harvests. Until recently, DayaCann produced over 1,000 kilos of dried cannabis flower every year. However, the Chilean government has limited the supply of cannabis to patients and has not approved the export of medical cannabis to international markets.

Auscann stated as a result of the anticipated developments, it sees its Chilean join venture become a non-core activity. Furthermore, the company noted its strategy has evolved to expand its offering of differentiated cannabis products.

Management commentary

Auscann CEO Mr Nick Woolf commented on the sale agreement:

The DayaCann joint venture became a non-core activity for AusCann due to the restrictions imposed by the Chilean government on the use and export of medicinal cannabis from Chile.

This Agreement strengthens AusCann’s capital position and enables management to focus on the Company’s core strategy of building value through R&D and a differentiated portfolio of cannabinoid-based pharmaceuticals, the first being our unique hard-shell capsules already launched into the market.

Auscann share price summary

The Auscann share price has tumbled in 2020, losing more than 50% of its value since the beginning of the year. Although higher today, the company is sitting just above its 52-week low of 13.5 cents, which was reached last week.

More reading

• Why the Unibail (ASX:URW) share price is rocketing 38% higher
• Domain (ASX:DHG) share price tumbles 8% lower on AGM update
• Leading brokers name 3 ASX shares to sell today
• COVID-19 over? Credit and debit card spend surges
• Share prices jump for two new IPOs on the ASX today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Domain Holdings Australia Ltd (ASX: DHG) share price has come under pressure on Tuesday following the release of its annual general meeting presentation.

At the time of writing, the property listings company’s shares are down 8% to $4.26.

What was in Domain’s annual general meeting update?

As well as providing a summary on its performance in FY 2020, the company also gave investors an idea of how it has been performing in the new financial year.

According to the release, trading year-to-date in FY 2021 (1 July to 31 October 2020) has improved since the fourth quarter of FY 2020. This is despite the impact of the COVID-related lockdown in Victoria.

Domain revealed that its Digital revenue is up around 4% year to date. However, due to the pause on print during the Victorian lockdown, the company’s total revenue is 7% lower compared to the prior corresponding period.

What about the rest of the half?

Management pointed out that it highlighted in August that the outlook for the first half would be determined by the duration of the Victorian lockdown and a return of more typical seasonality patterns for the Spring selling season.

And while the lockdown has now eased, it notes that seasonal patterns remain atypical, with a stronger performance in July, and a less pronounced peak in October.

In light of this, the company hasn’t provided any sales or earnings guidance for the first half.

It has, however, provided guidance on its costs. For the first half, its total costs (adjusted for divestments) are expected to reduce by around 12% from the FY 2020 first half base of $96.5 million.

This includes the benefits from the Federal Government’s Jobkeeper scheme and the company’s Project Zipline employee program. Excluding these two items, first half costs are expected to reduce by a more modest 1%.

More reading

• ASX stock of the day: Nine (ASX:NEC) share price surges on sporting venture
• ASX 200 hits 8-month high. Here’s why we could go higher from here
• 5 things to watch on the ASX 200 on Tuesday
• Nine (ASX:NEC) share price edges up on rugby union deal
• Why the Nine (ASX:NEC) share price has surged 30% in 3 months

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX shares:

AusNet Services Ltd (ASX: AST)

According to a note out of Morgans, its analysts have retained their reduce rating but lifted the price target on this utilities company’s shares to $1.80. The broker expects the company to benefit from favourable changes to expensing of capital expenditures. It also notes that the draft decision for electricity distribution is pointing to stronger revenue allowance than previously anticipated. However, this isn’t enough for a change of rating, with Morgans continuing to see its shares as overvalued at the current level. The AusNet share price is trading at $1.98 this afternoon.

Goodman Group (ASX: GMG)

Analysts at Goldman Sachs have retained their sell rating and lifted the price target on this property company’s shares to $12.24. This follows the release of a trading update, which saw Goodman reaffirm its earnings per share growth guidance of 9% for FY 2021. It feels that the company’s shares are expensive at ~29x forward earnings and thus has held firm with its sell rating. The Goodman share price is changing hands for $18.38 on Tuesday.

QBE Insurance Group Ltd (ASX: QBE)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $8.00 price target on this insurance giant’s shares. The broker has been looking at updates from its peers and notes that pricing momentum remains very strong. But this is still not enough for Macquarie to change its mind on the company. Its main concern appears to be that large portions of its business are non-core and expects a group-wide review to be undertaken. The QBE share price is trading at $9.79 this afternoon.

More reading

• Is the Goodman Group (ASX: GMG) share price the best REIT of 2020?
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• Goodman (ASX:GMG) share price trading higher after quarterly results
• Why Flight Centre, Goodman, Inghams, & Scentre shares are charging higher
• Why I would buy Woolworths (ASX:WOW) and these shares for a retirement portfolio

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The JB Hi-Fi Limited (ASX: JBH) share price is down 7.53% to $46.40 in late afternoon trading.

That’s heading in the opposite direction of the broader S&P/ASX 200 Index (ASX: XJO), which is up 0.5% at this same time.

What does JB Hi-Fi do?

JB Hi-Fi is a consumer goods retailer. The company’s products include a range of home entertainment, gaming, music and IT products as well as white goods and home appliances. The company has made several acquisitions over the years, including acquiring The Good Guys in 2016. It has also been actively expanding its online presence.

JB Hi-Fi has more than 300 stores across Australia and New Zealand. The company also operates online stores in both markets. JB Hi-Fi first began trading on the ASX in 2003.

Why is the JB Hi-Fi share price down today?

Shareholders in JB Hi-Fi have enjoyed a banner year, especially relative to the wider market.

While the ASX 200 is still down 5% since 2 January, the JB Hi-Fi share price is up 23%, even after today’s losses. And that gain comes despite shares getting ravaged by COVID-19 alongside most of the rest of the market, falling 47% from 10 February through to 25 March.

But in late March, JB Hi-Fi began to benefit from some wider trends impacting share markets.

With Aussies suddenly finding themselves working, shopping and socialising from home, demand grew for JB Hi-Fi’s large selection of consumer electronic goods and white goods, among others items.

The company also benefited from its large online footprint (it could make sales without people coming in-store), as well as government income support measures that put more money into consumers’ pockets.

And the JB Hi-Fi share price reflected this, rocketing 123% higher from the 25 March low to the all-time high of $52.40 per share on 25 August.

But last night’s coronavirus vaccine announcement from Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) looks to have stolen some of the tailwinds helping drive JB Hi-Fi, and indeed many ASX 200 tech shares, to new highs.

If the vaccine proves to effectively prevent more than 90% of symptomatic infections, as is hoped, it could see the end of expanded government income support measures. Even as people return to working from the office, shopping in brick and mortar locations, and socialising face to face.

That potential reality is still some ways off.

But judging by the falling JB Hi-Fi share price – and indeed the wider tech share selloff that’s sent the S&P/ASX All Technology Index (ASX: XTX) down 5% today – the market is optimistic that the year of the pandemic may soon be relegated to history.

More reading

• Why the Immutep (ASX:IMM) share price flew up 5% this morning
• 2 fast-growth ASX tech shares that are being sold off
• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher
• ASX stock of the day: Nine (ASX:NEC) share price surges on sporting venture
• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Credit and debit card spending in Australia surged a record amount last week, in a sign the nation might be feeling more confident.

Commonwealth Bank of Australia (ASX: CBA) on Tuesday revealed that the week ending Friday 6 November saw a 13% increase in card spend year-on-year.

That boost is the biggest seen since the bank started weekly analysis 8 months ago.

Commonwealth Bank senior economist Belinda Allen said the lifting of COVID-19 restrictions in Victoria and the opening of interstate borders saw Australians spend up.

“There was a lift in both online and in-store spending showing the breadth of the rise.”

The rise in card use indicated confidence in health was very much linked to confidence in the economy, according to Allen.

“Card spending on both goods and services lifted over the past week, but services spending was the dominant driver,” she said.

“Services spending on cards rose by 5% compared to a year ago and was the first positive print since the nationwide lockdown in March.”

Victorians celebrate getting out of the house

Credit and debit card spending in Victoria was up a stunning 15% for the week ending Friday 6 November, compared to the same period last year.

“Looking at Victoria, pent up demand and an easing of restrictions saw spending rise in all but one category we track, with communication the exception,” said Allen.

“Eating and drinking out still faces some restrictions but spending in this category is recovering and shows growing confidence in the health outcome.”

All states and territories saw an increase in card spend last week, with only the ACT (9%) not recording a double-digit boost.

Despite moving past the lockdown mentality, the household furnishings sector was still 37% up last week compared to last year.

Takeaway alcohol was not far behind, up 29% from last year.

Overnight news of a 90% effective vaccine from Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) sent the share market into a positive frenzy. So it will be interesting to see whether that’s also translated into consumer confidence in the current week’s card spending statistics.

More reading

• ASX energy shares blast off after COVID-19 vaccine news
• Will Pfizer’s COVID-19 vaccine end the ASX tech share rally?
• Here are the US shares that CommSec customers are buying
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success
• Why the CBA (ASX:CBA) share price and these ASX stocks could get a $100bn boost

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Two new companies have floated on the ASX today through an initial public offering (IPO) – DC Two Limited (ASX: DC2) and Duke Exploration Limited (ASX: DEX).

DC Two’s IPO price was issued at 20 cents per share. Shortly after trading began, the DC Two share price rose to 44 cents. It has since jumped up to 46.5 cents at the time of writing. Duke’s IPO price was at 25 cents, however after trading began, its share price immediately rose and is now trading at 28 cents.

About DC Two 

DC Two designs and operates data centres. The company is looking to raise $5.5 million at 20 cents a share through today’s IPO, with a market capitalisation of $11.7 million. 

The Perth-based company was founded in 2012 and currently owns two data centres – one at Bibra Lake and another at Osborne Park. DC Two’s best selling point is that it is able to construct modular shipping container-sized data centres, which it can easily deploy to any location in a matter of months, not years.

DC Two managing director Justin Thomas said the company intended to provide Western Australian businesses with more cloud hosting services.

“About 59 per cent of all Australian companies now have a cloud-first policy, which says that they don’t want to buy their own servers,” he said “COVID-19 is changing the conversation and customers are saying ‘OK, we got through the first wave, but it wasn’t great, how do we make it better?’”

The company will focus on the small and medium-sized customer segment rather than big enterprises, with equipment and bandwidth rental to retail customers not considered a big part of its offering. 

DC Two made $2 million in revenue in the year to 30 June, and posted a net loss of $209,000.

“In the next few years, our main focus is to complete our ISO accreditation for our cloud platforms. A lot of mid-market enterprise clients are demanding that accreditation for IT security,” Mr Thomas said. 

According to the company, DC Two will be the third local provider to have ISO accreditation on a cloud platform.

About Duke Exploration

Duke is a mining company with its flagship at the Bundarra copper, silver and gold project near Mackay in Queensland.

The company debuts on the ASX today to raise $8 million at a price of 25 cents per share. Commenting on the listing, Duke chairman Toko Kapea said that the IPO had been oversubscribed.

According to the mining company, Bundarra has the potential to be a large tonnage porphyry copper deposit, as mineralisation has been identified at surface. Duke began drilling at Bundarra in late October with six holes for 600 metres completed. All-up, the drilling project will comprise 43 holes for 7,040 metres with focus on the Mt Flora area. 

Mr Kapea said the company’s objective for 2021 was to “delineate the potential scope of Bundarra and a maiden resource for Mt Flora”.

“We expect drilling to continue throughout 2021 at Bundarra with preparations for drilling underway at Duke’s Prairie Creek gold project,” he said.

More reading

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• Tesla (NASDAQ:TSLA)’s ‘Teslaquila’ tequila sells out in hours
• Why the Anteris (ASX:AVR) share price is edging higher today
• Kleos Space (ASX:KSS) share price drops 6% as capital raising announced
• An ASX ETF for uncertain times

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The share prices of Australia’s biggest energy companies soared in today’s trading after news of an imminent COVID-19 vaccine hit the market in US trading hours. Biopharmaceutical company Pfizer Inc (NYSE: PFE) announced overnight that its vaccine was 90% effective after undergoing Phase-3 testing. 

The news of the vaccine has led to an anticipation of a bounce-back in the world economy, and is a particular boost to the energy markets. Oil prices immediately leapt at the news, and at the time of writing, the near-dated futures contract of Brent Crude has risen by 7.5% after the vaccine announcement.

Here are three ASX energy shares that have received a boost and are trading strongly today following the vaccine news.

Oil Search Limited (ASX:OSH)

Oil Search is an oil and gas producer based in Papua New Guinea (PNG). It is the largest company in PNG and its biggest investor, holding a 29% share of the ExxonMobil-operated PNG LNG Project. 

The company has not had a fantastic year in FY20 after releasing a rather downbeat Q3 trading update in October. In that announcement, it reported a 29% fall in revenue to $189 million, which was a 47.6% decline on Q3 FY19. The lower revenue was out down to the prevailing low energy prices, which caused a large reduction in the average realised LNG and gas price. At the time, the company also said that COVID-19 has severely impacted its business, and that it does not expect demand for LNG demand to fully recover until 2027.

The share price of Oil Search has had a horror year in 2020, tumbling by almost 60% before today’s rise. In today’s trading, the Oil Search share price has risen dramatically by almost 14%% to $3.34 at the time of writing, giving the company a market cap of $5.9 billion.

Santos Ltd (ASX: STO)

Santos is one of the leading independent oil and gas producers in the Asia-Pacific region. It supplies natural gas to Australian, Indonesian and other Asian markets, and develops oil and liquids businesses in Australia, Indonesia and Vietnam.

Santos has had a relatively good year in 2020 despite the pandemic. In October, Santos announced that it delivered record third quarter production of 25.1 mmboe, which was 22% higher than the prior quarter and driven by higher production in all five of the company’s core assets. Later that month, the company provided further optimism for FY21 when it announced that the cost of its Narrabri gas project would be much cheaper than the $3 billion-plus price tag being widely quoted.

Santos’s share price has declined by almost 40% in 2020 leading up to today’s trading. The share price has recovered by 12.77% today to $5.65, commanding a market cap of $10.4 billion at the time of writing.

Woodside Petroleum Limited (ASX: WPL)

Woodside is the largest operator of oil and gas production in Australia, and also Australia’s largest independent dedicated oil and gas company. 

This has not been a pretty year for Woodside, and its share price has been at the lowest levels since 2004. In its latest results announcement in October, it reported a decrease of revenue by 9% from Q2 2020, and 42% down from Q3 2019. It also announced a reduction of 8% in its workforce. The company cited that depressed LNG prices were the main reason for its lacklustre result.

Woodside’s share price was not spared the market woes this year, falling by around 46% in 2020. The Woodside share price is trading up by 7.3% today to $19.67 per share, giving the company a market cap of $17.6 billion.

More reading

• Why the Oil Search (ASX:OSH) share price is shooting 17% higher today
• Will Pfizer’s COVID-19 vaccine end the ASX tech share rally?
• Why Fletcher Building, Santos, Vitalharvest, & Webjet shares are storming higher
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Eddy Sunarto owns shares of Santos Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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It’s probably fair to say that Tesla Inc (NASDAQ: TSLA) – the California-based electric car and battery manufacturer – has amassed a certain reputation for the unconventional. Whether it’s the eccentric Tesla CEO Elon Musk’s regular (and sometimes, frankly bizarre) Twitter presence, futuristic Tesla vehicles like the Roadster and Cybertruck, or gimmicky products like the ‘Not a Flamethrower’ flamethrower and the infamous ‘short-shorts’, Musk and Tesla have certainly mastered the art of free advertising.

One of Tesla’s more recent products has been a Tesla-branded tequila. This is known as ‘Tesla Tequila’ – sometimes dubbed ‘Teslaquila’ despite a rejected copyright application. This Tesla Tequila comes in a lightning-shaped bottle (replete with a display stand). It is only available in certain states in the USA. Customers are restricted to buying 2 bottles at a time.

Tesla Tequila was first announced back on April Fool’s Day 2018, so naturally many people thought it was a prank. But according to reporting in the Australian Financial Review (AFR) today, Tesla Tequila has (of course) proved immensely popular. The AFR reports that Tesla Tequila became available for purchase last Thursday, but “was quickly listed as ‘out of stock’”… within hours of the product’s lift-off”.

Not a bad outcome for Tesla, one could argue, seeing as each bottle reportedly cost US$250 (A$343).

What have Tesla shares been up to this year?

This ‘breaking news’ comes after a huge year for Tesla shares and shareholders.

The electric vehicle company has spent the year rocketing to seemingly relentless new heights. The share price has climbed from US$86 at the start of the year to the current price of US$421.26. That’s a gain of 390%. Tesla shares are up more than 1,000% since May 2019.

Despite these massive gains, Tesla shares have been trading sideways for a while now, ever since making a new all-time high of US$502.49 around three months ago. The shares remain down around 15% from those highs.

Tesla also executed a highly publicised 5-for-1 stock split back in August, which pushed Tesla shares up more than 66% over the month of August alone.

Apple Inc (NASDAQ: AAPL) also announced a 4-for-1 stock split around the same time, and also subsequently benefitted enormously. That’s despite a stock split having no material impact or benefit for existing shareholders.

It will be interesting to see if this new product from Tesla lasts the test of time. Or indeed makes the company a material amount of money. Mr. Musk reportedly raised US$10 million from selling the ‘Not a Flamethrower’ flamethrowers, so who knows where this next venture could go!

More reading

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Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Tesla. The Motley Fool Australia has recommended Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Anteris Technologies Ltd (ASX: AVR) share price is edging higher today after releasing the results from its anti-clarification study.

During early morning trade, shares in the structural heart company pushed as high as $3.84 but have since retreated. At the time of writing, the Anteris share price is swapping hands for $3.75, up 2.46%.

Let’s take a look at what Anteris does and what were the clinical results.

What does Anteris do?

Anteris, formerly known as Admedus Ltd, is a medical company that focuses on designing and manufacturing heart valves. Its next-generation technology re-engineers xenograft tissue into pure collagen scaffold, helping surgeons replace valves for patients during surgery.

Positive interim results

Anteris advised that it received positive results in its anti-clarification study using its Adapt technology.

The four-month interim report showed superior attributes for anti-clarification compared to other tissues used in competitor valves. The treated tissue used in the DurAVR 3D single-piece aortic value exhibited a 40% less calcium concentration. This was measured against the Medtronic AOA arm, tissue used in commercially available surgical aortic valve replacement (SAVR) and transcatheter aortic valve replacement (TAVR) valves.

In the study, 48 juvenile rats were implanted with four different samples underneath the skin for evaluation. The company stated that the concluded results correlated with existing clinical data. Head-to-head trials displayed significant differences between Adapt tissue and Edwards Life Sciences’ Thermafix tissue at the eight to 12-month mark.

Anteris noted that clarification (hardening) is a major contributor to the failure of heart valve replacements made from animal tissue.

The final results at the end of the 8-month study will be submitted to the United States Food and Drug Administration (FDA). The company hopes to demonstrate that its DuARV product is better than the currently available valves in the market.

What did management say?

Anteris CEO Wayne Paterson commented on the findings and pathway for commercialisation. He said:

The results were highly positive for ADAPT, indicating our ADAPT anti-calcification treatment is statistically superior to both of the major competitors.

Whilst we have long understood the clinical superiority of ADAPT, it’s critical for the regulatory submission to prove this against market incumbents specifically in the TAVR space.

About the Anteris share price

The company went through a name change earlier this year as a part of its restructuring program. Since completion of the shuffle, the Anteris share has not been a strong performer, falling more than 50% from May.

Shares in the med tech business have been mostly stagnant the past couple of months hovering around the $4 mark.

More reading

• Kleos Space (ASX:KSS) share price drops 6% as capital raising announced
• An ASX ETF for uncertain times
• Why the Vitalharvest (ASX:VTH) share price is rocketing 23% higher
• The Readytech Holdings Ltd (ASX:RDY) share price has doubled since March
• Why the Oil Search (ASX:OSH) share price is shooting 17% higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Kleos Space (ASX: KSS) share price has fallen 6.40% at the time of writing to 80 cents after a trading halt of the company’s securities was lifted. The company announced a capital raising today, which will consist of a placement to institutional and sophisticated investors. 

The Kleos Space placement

Kleos raised approximately $19 million from institutional and sophisticated investors at a price of 72 cents per share. This was a discount of 16.3% to the previous closing price of 86 cents per share. 

According to the company, the proceeds of the placement will be used for:

• funding the company beyond the launch of its second cluster of satellites to end 2021
• accelerating development of the company’s third cluster of satellites
• sales and marketing
• working capital
• funding the costs of the placement

The placement will be conducted in 2 tranches with the first $7.2 million issued in accordance with the ASX listing rules and shareholder approval at a general meeting required for the remaining $11.8 million.

What else has Kleos been up to?

According to Kleos, the company successfully launched its first cluster of 4 satellites on 7 November 2020. The satellites will provide radio frequency data for its customers, allowing them to monitor activity in a number of maritime locations.

The Kleos satellites will detect maritime activity that, according to the company, is otherwise undetectable and includes uses such as defence and national security along with the intercept of criminal activity.

The company expects that the satellites will provide revenue from the first quarter of FY2021, with agreements already in place with the US Airforce, L3Harris Technologies Inc (NYSE: LHX) and multiple government entities. The annual licensing fees for the first cluster of satellites will be between $128,000 and $971,000 per license and the number of initial licenses targeted is around 130. Kleos expects growth in its subscriber base over time.

Kleos plans to launch its second cluster of satellites on the SpaceX Falcon 9 rocket in mid 2021, which it expects will provide an opportunity to generate further revenue.

About the Kleos share price

Kleos shares are up 433% from their 52-week low of 15 cent and up 158.06% since the beginning of the year. The Kleos share price is up 128% since this time last year.

More reading

• Kleos Space (ASX:KSS) in trading halt after breakthrough news
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Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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