Why the Catapult (ASX:CAT) share price is down 12% today

This tech share is under pressure on Thursday…

| More on:
asx share price fall represented by woman shrugging

Image source: Getty Images

The Catapult Group International Ltd (ASX: CAT) share price has returned from its trading halt and is tumbling lower.

In early trade, the sports analytics and wearables company’s shares are down 12% to $1.92.

Why is the Catapult share price tumbling lower?

The weakness in the Catapult share price today follows the completion of its equity raising.

According to the release, the company has raised $35 million via an underwritten institutional placement of new shares at a price of $1.90. This represents a discount of 12.8% to its last close price.

The company advised that the placement was well supported, with strong investor demand from domestic and international institutions, both existing and new. In addition to this, two Catapult directors will subscribe for $1.35 million of shares on the same terms.

Catapult will now seek to raise a further $5 million via a share purchase plan. Eligible shareholders will have the opportunity to acquire up to $30,000 of new shares at the same price.

Why is Catapult raising funds?

Catapult is raising funds partly to support the strategic acquisition of leading sports software video solutions provider, SBG Sports Software. It also plans to increase its investment in technology, product, data science, and scale capacity, to accelerate its growth strategy.

In respect to SBG Sports Software, it is a global leader of video and data analysis solutions to elite teams in flow sports and motorsport. Management expects the strategic acquisition to accelerate growth in an unpenetrated section of Catapult’s core market.

Catapult’s CEO, Will Lopes, commented: “We are pleased to close the placement process a day earlier than planned. We have been overwhelmed with the endorsement from new and existing shareholders. The significant support we’ve received from the investor community, the board, and employees further cement our belief in the quality of the SBG acquisition and the exciting growth opportunity for Catapult. We are energized to translate this support into new and exciting solutions for our customers.”

The Catapult share price is now trading broadly flat year to date.

Should you invest $1,000 in Catapult right now?

Before you consider Catapult, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Catapult wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor 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 and has recommended Catapult Group International Ltd. The Motley Fool Australia owns shares of and has recommended Catapult Group International Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

Share Fallers

Why Boral, Eagers Automotive, PolyNovo, and Serko shares are dropping

These ASX shares are under pressure on Wednesday...

Read more »

Rede arrow on a stock market chart going down.
Share Fallers

Why Brambles, James Hardie, Seek, and Sezzle shares are sinking

These ASX shares are under pressure on Tuesday...

Read more »

man bending over to look at red arrow crashing down through the ground
Share Fallers

Australian Strategic Materials share price sinks 12% following rally

Here's what's going wrong for the critical metals producer today.

Read more »

Sad woman with her hand on her head and holding a credit card.
BNPL shares

Why is the Sezzle share price tumbling on Tuesday?

Sezzle shares are falling today after the BNPL provider released an update...

Read more »

Rede arrow on a stock market chart going down.
Share Fallers

Why the Integrated Research share price is cascading 15% today

Clouds gather around Integrated Research amid latest trading update.

Read more »

Red arrow going down, symbolising a falling share price.
Share Fallers

Why Imugene, Integrated Research, Monash IVF, and Step One shares are sinking

These ASX shares are falling on Monday...

Read more »

Share Fallers

These were the worst performers on the ASX 200 last week

These ASX 200 shares were sold off last week...

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Share Fallers

Why A2 Milk, Gold Road, GrainCorp, and Monash IVF shares are dropping

These ASX shares are falling on Friday...

Read more »