Why Family Zone Cyber Safety Ltd shares stormed higher

The Family Zone Cyber Safety Ltd (ASX: FZO) share price has emerged from its trading halt with a move higher on Wednesday.

Although it has given back some of its early gains, the cyber safety company’s shares are up 4% to 65.5 cents in afternoon trade.

What happened?

Investors have responded positively to the company’s recent capital raising. This morning Family Zone advised that it has successfully raised $5 million via a placement of shares with sophisticated and institutional investors at 60 cents per share.

This was just a three cents per share discount to its last close price.

According to the release, net ​proceeds ​of ​the ​capital ​raising ​will ​support its ​aggressive ​expansion ​in ​the ​attractive ​New Zealand ​market ​and ​accelerate ​integration ​of ​the ​Linewize ​and ​Family ​Zone ​platforms.

Family Zone recently completed the acquisition of fast-growing New Zealand-based education technology provider Linewize.

Management believes it provides it with strategic opportunities to build out features, transform service levels, and achieve order of magnitude reductions in service costs through Linewize’s innovative and world class cloud technology.

Analyst reveals 3 revolutionary tech companies to watch on the ASX

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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