The Kogan.com Ltd (ASX: KGN) share price climbed to a new record high on Wednesday after providing an update on its share purchase plan (SPP).
The ecommerce company's shares climbed as much as 5.5% to $17.67 in morning trade before fading into the red this afternoon.
What did Kogan announce?
This morning Kogan revealed the results of the SPP it announced in June.
According to the update, the SPP was significantly oversubscribed with applications totalling $115.2 million. This compares to its original target of $15 million.
Given the strong support shown by eligible shareholders, Kogan has decided to increase the SPP size by $5 million above its original target to $20 million.
These funds were raised at $11.45 per new share, which represents a 7.5% discount to the Kogan share price on the day the SPP was announced in June.
Including its institutional placement which completed last month, the ecommerce company has now raised a total of $120 million.
Why did Kogan raise funds?
The proceeds from the placement and SPP will be used to provide the company with the financial flexibility to act quickly on future value accretive opportunities and acquisitions.
Management appears confident that these funds will create value for shareholders.
In June, Kogan Chairman Greg Ridder commented: "We would like to thank our existing shareholders for their strong support for this capital raising, and also recognise the overwhelming interest from new investors. We recognise the significant trust placed in our management team to deliver a strong return on your capital, and we have every confidence the team will rise to the challenge. To all our shareholders, your company has gone from strength to strength since listing and, with the capital we have raised this week, your company is now stronger than ever."
Judging by the Kogan share price performance since this capital raising was announced, the market seems to be very positive on its growth plans.
