In late morning trade the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is heading lower. At the time of writing the benchmark index is down 0.1% to 6,006.1 points.
Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:
The Cann Group Ltd (ASX: CAN) share price has crashed 16% lower to 69 cents. This morning the cannabis company announced a heavily discounted $24.3 million capital raising. These funds were raised at $0.40 per new share, which represents a 51.2% discount to its last closing price. Cann advised that the proceeds from capital raising will be used to fund its business while it pursues near-term growth opportunities It also revealed that it is gaining strong commercial momentum and is forecasting FY 2021 revenues of $15 million.
The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 4.5% to $10.27. The domestic travel market was dealt a blow this morning when the New South Wales government announced that COVID-19 restrictions will be extended to restaurants, bars, cafes, and clubs. A number of other notable travel and tourism companies have dropped lower with Flight Centre today.
The Helloworld Travel Ltd (ASX: HLO) share price has fallen 7.5% to $1.82. This follows the completion of its institutional placement and entitlement offer this morning. Helloworld raised gross proceeds of approximately $41.6 million at an offer price of $1.65 per new share. This represents a discount of 16% to its last close price. The proceeds of the equity raising will provide it with balance sheet liquidity through to 2022.
The Zip Co Ltd (ASX: Z1P) share price is down a further 6% to $5.58. Investors have been selling the payments company’s shares this week after they were downgraded by a leading broker. UBS downgraded Zip to a sell rating with a $5.70 price target. As the Zip share price has now fallen below this target price, I suspect it might start to find support from buyers.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Helloworld Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. 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.