Shares of Genedrive (LON: GDR) have plunged on Friday after the company announced a placing to raise up to £6 million and an open offer to qualifying shareholders to raise up to £4.5 million.
The company will be placing up to 24 million new shares. The open offer is on the basis of 2 open offer shares for every 7 ordinary shares held on the record date. The open offer will be made to qualifying shareholders.
The AIM-listed firm said the issue price will be 25p per share, representing a discount of approximately 40.1% on the closing price on 9 September.
Genedrive will use the funds for two near-term revenue opportunities. The first is the final development of the Genedrive COV19 ID Kit, as well as supporting the commercial rollout of its Antibiotic Induced Hearing Loss test, Genedrive MT-RNR1 ID Kit.
The money will also provide the company with additional funding to cover further product development, commercialisation and general corporate costs.
Genedrive's share price has plunged over 32% to 28p following the news. For the year to date, Genedrive shares are down 42.27%.
Genedrive shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are GDR shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.