Here’s why the Australian Primary Hemp (ASX:APH) share price is rocketing 31% higher

The Australian Primary Hemp Ltd (ASX: APH) share price is rocketing higher today after announcing it has secured firm commitments through a placement to fund its growth strategy.

| More on:
ASX Cannabis share price represented by asx investor holding card with cannabis leaf on it

Image source: Getty Images

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 Australian Primary Hemp Ltd (ASX: APH) share price is rocketing higher today.

This comes after the company announced it has secured firm commitments through a placement to fund its growth strategy.

At the time of writing, the company’s shares are up an astonishing 16% to 44 cents.

It’s worth noting that during the opening minutes of trade, the Australian Primary Hemp share price reached a multi-year high of 62 cents.

Placement in detail

According to the release, Australian Primary Hemp welcomed the firm commitments to raise roughly $5.2 million through a strategic placement with an offer price of 32 cents per share price.

Under the placement, approximately 16 million ordinary shares will be issued with an offer price of 32 cents per share. This represents a steep discount of 36% on the current Australian Primary Hemp share price.

The company noted that the placement received strong support from new investors, existing institutional investors, and high-net worth investors.

Monies raised from the placement will complement its proposed $1 million share purchase plan. Together, the funds will be used to assist Australian Primary Hemp in driving its growth strategy and ongoing transformation process.

This included investment in capital equipment purchases, marketing and sales costs, general capital working requirements, and strengthening the balance sheet.

Australian Primary Hemp revealed that it is seeking to transition its business into a branded, value-added health and wellness company.

To be an eligible shareholder for the share purchase plan, you needed to be on the company’s register by last night.

For those who were lucky enough, the offer period of the share purchase plan closes on February 10, 2021.

Management commentary

Australian Primary Hemp managing director and CEO, Mr. Neale Joseph, touched on the placement, saying:

We are highly encouraged by the level of support investors have shown for APH.

There are significant tailwinds and growing consumer demand for high-quality, plant-based ‘superfoods’, particularly hemp-based products. This growing demand is reflected in the retail distribution agreement we have recently secured with Woolworths and 7-Eleven, which will see our Mt. Elephant brand of health and wellness products made available to consumers across Australia.

About the Australian Primary Hemp share price

The Australian Primary Hemp share price has performed quite well over the last 12 months, gaining over 170%.

Its shares took a tumble during COVID-19 where they were swapping hands for as little as 4.9 cents in March.

However, since then, the Australian Primary Hemp share price took a turn to march higher over the last 9 months.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Investor sitting in front of multiple screens watching share prices
Share Market News

5 things to watch on the ASX 200 on Thursday

The ASX 200 is expected to have a better day on Thursday...

Read more »

Two hands being shaken symbolising a deal.
Mergers & Acquisitions

How many global mega deals involved ASX 200 shares in the first half of 2022?

Deal making among ASX 200 shares helped drive a 25.4% increase in M&A activity in Australia in the first half…

Read more »

Top 10 blank list on chalkboard
Share Market News

Here are the top 10 ASX shares today

Here are your top 10 biggest gainers in the ASX 200 on Wednesday.

Read more »

a man peers between two large piles of papers and files with a wide-eyed, wide-mouth look of dread at the amount of work he has to do.
Share Market News

Here are the 3 most heavily traded ASX 200 shares on Wednesday

We take a look at the most traded ASX 200 shares by volume today.

Read more »

workers stand over a large spool of copper pipe.
Share Market News

ASX copper shares in the red as copper price sinks to 19 month low

Copper prices fell in global markets overnight.

Read more »

Man with rocket wings which have flames coming out of them.
Share Market News

EML share price leaps 16% on Spanish government stimulus contract

EML shares are on fire on Wednesday...

Read more »

Share Market News

ASX 200 midday update: BHP and Fortescue sink, EML and ZIP jump

The ASX 200 is having a difficult day due to weakness in the mining sector...

Read more »

Business woman watching stocks and trends while thinking
Share Market News

5 things to watch on the ASX 200 on Wednesday

The ASX 200 looks set to have a tough day on Wednesday...

Read more »