Key points:
- Supply@Me Capital shares plunged 14.3% on loan note conversion.
- The conversions help the company avoid cash payments but dilute investors.
- Many are waiting for the inventory monetisation company to become profitable.
The Supply@Me Capital PLC (LON: SYME) share price plunged 14.3% after the inventory monetisation company revealed that it had received a conversion notice from Mercator Capital regarding the convertible loan notes issued to the company.
Also read: The Best Undervalued Stocks to Watch in 2022.
In the latest announcement, SYME revealed that Mercator Capital wanted to convert the remaining £178,333.34 into ordinary shares. The conversion resulted in the issuance of 316,446,349 shares priced at 0.056p each.
The new shares will be admitted to trading on the London Stock Exchange’s primary market on or around 29 March 2022. The drop in SYME shares reflected the discount given to Mercator compared to SYME’s Friday closing price.
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Mercator Capital has converted an initial £500,000 of the convertible loan notes issued by Suply@Me Capital on 25 February 2022. The latest conversion is the last conversion since SYME issued the £678,333.34 loan to Mercator on 2 February 2022.
The company still has another £678,333.34 outstanding convertible loan issued on 4 March 2022 to cover its working capital needs, fund operations, and corporate purposes.
The loan conversions help SYME avoid making cash payments to its creditors, resulting in the significant dilution of existing shareholders due to the issuance of new shares.
Given how low SYME’s share price is currently, the inventory monetisation company may have to conduct a reverse stock split to shore up its share price.
Many investors are waiting for SYME to start making profitable moves, given the massive potential available in the global inventory funding industry. Still, the company experienced some delays that pushed ahead many of its operational timelines.
*This is not investment advice. Always do your due diligence before making investment decisions.
Supply@Me Capital share price.
SYME share price plunged 14.29% to trade at 0.06p, falling from Friday’s closing price of 0.07p.