The Audinate Group Ltd (ASX: AD8) share price has returned from its trading halt and dropped deep into the red.
In morning trade, the audio-visual media networking solutions provider's shares have fallen as much as 10% to $12.84.
Why is the Audinate share price sinking?
The catalyst for the weakness in the Audinate share price on Friday has been the completion of an equity raising.
According to the release, the company has successfully completed a $50 million fully underwritten placement at an issue price of $13 per new share. This represents a 9% discount to its last close price.
The company will now push ahead with a non-underwritten share purchase plan (SPP) to raise up to $20 million from retail shareholders.
This will be at the lower of the placement price or a 2% discount to its volume weighted average price for the five days up to and including the SPP closing date.
Why is the company raising funds?
Audinate advised that the proceeds from the equity raising will be used to deliver organic growth through continued strategic investment in new and innovative products.
This includes focusing on its 'Win in Video' plan by building on early success and providing flexibility to explore a pipeline of identified bolt-on acquisition opportunities.
Audinate's CEO, Aidan Williams, was pleased with the support the equity raising received. He said:
We greatly appreciate the support of existing shareholders and the opportunity to bring some new investors onto the register. Recent positive results and support from investors position us well to "win in video" and accelerate our vision of the operating system for AV. We are conscious of the trust placed in us to deploy this additional capital wisely in our longer strategic mission to pioneer the future of AV.
Despite today's sizeable decline, the Audinate share price remains up more than 50% over the last 12 months.
