The WiSA Technologies Inc (NASDAQ: WISA) stock price plunged 46% after raising $7.6 million by selling 54 million units of stock at $0.14 each. The units represented one share of common stock, one Series A warrant to purchase a share of common stock, and one Series B warrant.
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Investors' adverse reaction to the capital raise was more significant than the discount offered to the new shareholders, given that WiSA’s stock price fell way below the $0.14 price paid by the new investors. The massive decline indicates the sour investor attitude towards the company.
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WiSA’s stock price has fallen 88% this year and has received multiple downgrades from analysts at various banks. The latest downgrade came from Maxim Group on Monday this week when Jack Vander Aarde, an analyst at the firm, lowered his price target from $2 to $1. Maxim Group was the sole placement agent for WiSA’s latest capital raise.
The company has recently lost investor confidence, given that its shares fell 70.52% in November. In addition, WiSA announced at the end of October that it was exploring strategic options related to its Intellectual Property (IP) and its licensable software used in WiSA E and WiSA DS technologies.
The company hired QA Technology Partners to help it during Q3 and recently reported that four companies had signed non-disclosure agreements (NDAs) regarding a potential transaction. While the firm considered multiple options, it warned that it might not secure a deal, which spooked investors.
WiSA Technologies was ocnsidering options such as an acquisition, a sale of assets, including most of its current assets, a merger, a partnership, a business combination, and joint ventures.
The company also warned investors that it would only disclose additional information about the process once there was substantial progress in signing a definitive agreement or when the board ends the process if no deal materialises.
The language used by the management was primarily negative and did not sit well with investors. Today’s capital raise came despite the company not updating the markets about the progress of its strategic review, which triggered the plunge in WISA shares.
*This is not investment advice.
WiSA Technologies stock price.
The WiSA Technologies stock price plunged 46.03% to trade at $0.0891, from Tuesday’s closing price of $0.1651.
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