The Tern PLC (LON: TERN) share price fell 9.35% despite the company announcing the launch of a satellite IoT network service by its portfolio company Wyld Networks. The satellite network will provide 100% global network connectivity for IoT devices.
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The satellite network launched today is an industry first, and Tern is set to benefit from any profits generated by Wyld Network since it owns a 46.5% stake in Wyld Networks. The satellite network has been developed over the past three years and will provide IoT devices on the earth’s surface connectivity.
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According to McKinsey, over 85% of the world’s surface does not have internet coverage, hampering IoT device adoption. However, Wyld Networks' new satellite network will provide 100% global coverage, an impressive feat by all standards.
The company has launched a network of Low Earth Orbit (LEO) satellites that will allow business and government to connect their IoT devices globally. The firm expects growth in the IoT sector to add US$ 2-3 trillion to the global GDP in the next ten years.
Wyld Networks collaborated with 40 launch partners to make its project a reality. As a result, it has an order backlog of SEK 34 million composed of purchases of its Wyld Connect IoT module and data service. The company expects to attract more customers and partners next year.
The decline in Tern shares was driven by news that the company had raised £1.5 million via a subscription where it sold 15 million new ordinary shares at 10p each. The price offered to the participating investors represented a discount to yesterday’s closing price.
Only one registered institutional investor participated in the capital raise on condition that the company repays an outstanding £400,000 loan facility from the investor. The investor also wanted to retain the benefit of the Wyld Network's AB shares, currently subject to a call option.
The investor agreed to forfeit their call options once Tern repaid the outstanding loan facility and agreed to work with the company to help it maximise shareholder value in all its investments.
Tern shares have rallied 49.7% over the past month and are down just 12.7% for the year.
*This is not investment advice.
Tern share price.
The Tern share price fell 9.35% to trade at 10.66p, from Wednesday’s closing price of 11.76p.
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