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Kalera Stock Plummets 67% on $8.84M Fundraise. Is There Hope?

Simon Mugo trader
Updated 27 Oct 2022

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Key points:

  • Kalera stock plummets 67% on $8.84m fundraise.
  • Investors were surprised by the decision to raise funds.
  • Many are waiting for a comprehensive update from Kalera.

The Kalera PLC (NASDAQ: KAL) stock price plummeted over 67% after announcing the pricing of its latest capital raising initiative as it issued 68 million shares of common stock priced at $0.13 each to the public. As a result, the vertical farming specialist saw its shares sink on the news.

Investors expressed dissatisfaction with the move by selling their shares, which saw over 5.49 million shares change hands by going to the press. The capital raise is the latest move from the company after announcing plans to divest its seed genetic business in mid-October.

Also read: Five Best Shares For Beginners To Watch In 2022.

Investors were unhappy with the massive dilution of existing shareholders. It remains to be seen how the company’s management will use the funds raised, including whether they shall proceed with plans to divest the vertical farming company’s international assets.

Kalera surprised investors with the move to suddenly raise cash, while many are waiting for progress on selling its international operations in Singapore and Kuwait to focus exclusively on its US farms.

The company said that selling its international assets would allow it to focus on its US farms and make them cash flow positive much faster since the attention of its management team based in Orlando will be on a much smaller geographical region.

Kalera also intends to reduce its overall cash burn as investors grow wary of funding businesses that are not generating a profit and do not have a clear path to profitability.

Many are waiting for the company to issue an update on how it will use the funds raised and, most importantly, the progress made, if any, regarding divesting its international business. Meanwhile,

Kalera stock price.

Kalera stock price 27-10-2022
Source: Tradingview

The Kalera stock price plummeted 67.05% to trade at $0.0692, falling from Wednesday’s closing price of $0.2100.

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