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GSTechnologies (GST) Shares Plunged 9.1% on Loan Conversion

Simon Mugo trader
Updated 18 Jan 2023

The GSTechnologies Ltd (LON: GST) share price plunged 9.09% after its loan facility provider requested to convert a portion of a loan facility advanced to the company into ordinary shares as agreed when the loan facility was issued.

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YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The company has agreed to convert part of the loan facility worth US$275,000 in principal amount and an additional US$27,500 (10%) in accrued interest on the loan facility into 50,560,138 new ordinary shares priced at 0.491 pence each.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

Investors’ adverse reaction to the announcement can be attributed to the lower price offered to the convertible loan notes holder, given that GST shares were trading at 0.60p when the markets closed yesterday. However, the decline did not reach the price offered to the new shareholder. 

GSTechnologies revealed that it had a loan balance of US$525,000 in principal amount after today’s conversion, without including the 10% interest charged on the loan. The company noted that it had applied to the London Stock Exchange (LSE) to have the new shares listed, and it expects the shares to start trading on the LSE on 23 January 2023. 

Regular readers will remember that GST secured a $1.6 million loan facility from an unnamed institutional investor on 28th December 2022, shortly after it released its interim financial results on 20th December 2022. 

The institutional investor remains anonymous to date but was introduced to the company by its broker, OvalX. The firm immediately made the first drawdown of $800,000, with the second tranche being available from 26 June 2023. 

GSTechnologies interim results for the six months to 30 September 2022 showed a net loss of $1,153,000 primarily due to the losses made by EMS Wiring Systems, which was not a core operation and was finally divested by the company. 

The company is now focused on next-generation digital money solutions following the disposal of EMS Wiring Systems to one of its executives. The soft launch of its GS20 Exchange in November 2022 was a significant milestone in its transition into a fintech company. 

*This is not investment advice. 

GSTechnologies share price. 

The GSTechnologies share price plunged 9.09% to trade at 0.55p, from Tuesday’s closing price of 0.60p.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading