The Douugh (ASX:DOU) share price is sinking 9% on Friday. Here’s why

Investors are dumping Douugh shares in droves…

| More on:
Douugh investor looking angry while talking on phone and looking at computer

Image source: Getty Images

The Douugh Ltd (ASX: DOU) share price is nosediving during Friday afternoon. This comes after the financial wellness app provider released its share purchase plan (SPP) offer booklet to investors.

At the time of writing, the Douugh share price is 7.1 cents, down 8.97%. It has fallen by 15% in the past week.

Share purchase plan details

ASX investors are selling Douugh shares after the company invited retail shareholders to participate in its SPP.

Following the successful $8 million placement, Douugh has extended its offer to eligible shareholders. Under the SPP, investors can apply to buy a parcel of shares at a price of 7.2 cents.

The same terms offered in the placement represent a discount of 13.2% on the closing price on 1 December (to be eligible for the SPP). This is also an 18% discount to the volume-weighted average Douugh share price over the 5 days before the company announced the SPP.

Investors can apply for a minimum application amount of $2,000 up to a maximum application amount of $30,000.

The company is seeking to raise $2.5 million through the SPP. However, Douugh may scale this back or increase it depending on the total value of the applications.

Together with the placement, Douugh aims to capitalise on the strong momentum experienced since August 2021. Douugh will use the funds to accelerate user and revenue growth by investing in research and development as well as marketing initiatives.

The closing date for the SPP is 23 December. The new Douugh shares will be issued on 4 January 2022. They will be tradeable from the following day.

Douugh share price snapshot

Over the past 12 months, the Douugh share price has plummeted in value by about 70%. Year-to-date has been just as disappointing, down by almost 60% after investor sentiment waned.

Based on today’s price, Douugh commands a market capitalisation of $32.21 million with approximately 453.71 million shares on issue.

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

Before you consider Douugh, 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 Douugh 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 Aaron Teboneras has no position in any of the stocks mentioned. 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

Red arrow going down, symbolising a falling share price.
Capital Raising

Why is the Australian Vanadium share price crashing 17% today?

The Australian Vanadium share price is tumbling on Friday...

Read more »

A group of business people face the camera clapping after Green Technology Metals, an ASX lithium share, announces a capital raise and new investor
52-Week Highs

Green Technology Metals share price lifts on Lithium Americas investment

This ASX lithium share has surged in value over the past year and now it's got a major new investor.

Read more »

A Latin Resources investor sits at her desk and stretches her arms above her head in delight at the rising share price today
Capital Raising

Why is the Latin Resources share price powering ahead today?

Latin Resources is boosting its balance sheet...

Read more »

a person's legs and an arm sticks out from underneath a large ball of scrunched paper.
Capital Raising

16 million new Zip shares will hit the ASX on Monday. What does this mean?

Zip is about to welcome some new shares to the market. Here's why...

Read more »

A person wrapped in warm clothing with head, eyes and face covered by a hat, glasses and a scarf is coated in a layer of snow and ice. representing Strike Energy's trading halt today
Capital Raising

Why is the Ionic Rare Earths share price frozen today?

This rare earths share is not trading today. Here's what we know.

Read more »

illustration of laptop with down arrow and the word zip representing zip share price going down.
Capital Raising

Zip share price sinks following share purchase plan results

Zip shares are having another shocker day.

Read more »

A woman with bright yellow hair wearing a brightly patterned blouse reacts to big news that she's reading on her phone.
Capital Raising

Why did the Zip share price get smashed in March?

Zip's shares were sold off again in March...

Read more »

a boy with sad eyes pulls the zip over his mouth and nose while doing up a large jacket where the collar stands up at head height.
Capital Raising

Zip share price backtracks ahead of share purchase plan closure

The buy now, pay later provider is set to close its share purchase plan at 5pm today.

Read more »