WiseTech Global share price drops 7% lower after raising $300 million: Should you invest?

The WiseTech Global Ltd (ASX:WTC) share price has returned from its trading halt after raising $300 million. Should you invest?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The WiseTech Global Ltd (ASX: WTC) share price has returned from its trading halt this morning.

In early trade the logistics platform provider's shares have fallen 7% to $21.55.

Why were WiseTech Global's shares in a trading halt?

WiseTech Global's shares were placed in a trading halt on Tuesday whilst it undertook a fully underwritten placement of shares.

This morning the company advised that it successfully completed the placement, raising a massive $300 million at $20.90 per share. This placement is 20% higher than the $250 million that it was initially looking to raise.

Management made the decision to increase the size of the placement to partially accommodate the significant demand from local and global institutional investors.

WiseTech Global's founder and CEO, Richard White, appeared to be delighted with the market's reception to its placement.

He said "We are energised by the incredibly strong support shown by both existing, and new high-quality, institutional investors for WiseTech. This capital will add further strength to our balance sheet, our vision of digitally empowering and enabling the global logistics industry and will increase the capacity to accelerate our long-term organic growth, through relentless innovation and the acquisition of strategically valuable assets in important new geographies and key adjacencies."

The settlement of the placement is expected to occur on Friday March 22, with the allotment of shares expected to occur on Monday March 25.

Retail investors will now have the opportunity to participate in a non-underwritten share purchase plan to raise up to $30 million. The issue price under the plan will be the lower of the placement price or a 2% discount to the 5-day volume weighted average price at its closing date of April 11.

Should you invest?

I think the placement was a smart move by management and puts the company in a very strong position to maintain its impressive growth trajectory.

In light of this, I continue to believe that it would be a great buy and hold investment option in the tech sector along with Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX). This could make it worth buying shares on today's share price weakness.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium, Appen Ltd, and WiseTech Global. 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 Scott Phillips.

More on Share Fallers

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why 29Metals, Brainchip, Platinum, and Premier Investments shares are falling today

These ASX shares are having a tough time on hump day.

Read more »

Man with his head in his head because of falling share price.
Share Fallers

Why 29Metals, Atlas Arteria, IDP Education, and Mineral Resources shares are falling

These ASX shares are having a tough time on Tuesday. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ALS, EOS, NRW, and Patriot Battery Metals are dropping today

These ASX shares are starting the week in the red.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why AGL, Brickworks, IGO, and New Hope shares are dropping today

These ASX shares are having a poor session. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Amcor, Arafura, Brainchip, and South32 shares are tumbling today

These ASX shares are having a tough time on hump day. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Aussie Broadband, Liontown, Metals Acquisition, and Seek shares are falling

These ASX shares are having a poor session. But why?

Read more »