Here’s why the Envirosuite (ASX:EVS) share price fell today

The environmental management solutions company has achieved its goal of raising $10.5 million

| More on:
Close up of a sad young Caucasian woman reading about Leigh Creek Energy's declining share price on her phone

Image source: Getty Images

The Envirosuite Ltd (ASX: EVS) share price finished in the red today after returning from its trading halt on Friday morning.

At the close of trading for the week, Envirosuite shares were down 2.22%, swapping hands at 22 cents a piece.

Trading was paused while the environmental management solutions company conducted a capital raise to drive growth in its water treatment technology segment.

What’s happening with Envirosuite?

The catalyst for the Envirosuite share price drop today may have been the capital raise, which dilutes the value of each share. A total of 52.3 million new shares were placed on the market at 20 cents a piece.

The shares were offered at a 15% discount on a share price high of 23.5 cents on 25 November.

As a result, Envirosuite achieved its goal of raising $10.5 million and hailed the capital raise a success.

Furthermore, the company will use proceeds of the capital raise to invest in growing the direct sales in its EVS Water product. This includes growing the sales team and forming new partnerships to achieve sales success.

EVS Water is a 3-product platform that links artificial intelligence with leading water modelling approaches. It helps companies reduce their operational risk and expenses while remaining compliant.

Management commentary

Envirosuite chief executive officer Jason Cooper said:

This capital raising is about growth. That we have been able to raise capital in a highly sought-after placement at a materially superior price than the previous tranche of growth funding is indicative of the trajectory of the business and investors’ appreciation of the opportunity that lies before us.

Envirosuite share price snapshot

Envirosuite shares have grown around 17% in the past 12 months. To put this in perspective, the S&P/ASX 200 Index (ASX: XJO) has climbed around 9% in that time. The Envirosuite share price is down 6.4% over the past month.

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

Before you consider Envirosuite, 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 Envirosuite 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

The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Capital Raising