Why did the Audinate share price just sink 10%?

This tech share is back from a trading halt and is tumbling into the red.

| More on:
A young man stands facing the camera and scratching his head with the other hand held upwards wondering if he should buy Whitehaven Coal shares

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 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.

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. has positions in and has recommended Audinate Group. The Motley Fool Australia has positions in and has recommended Audinate Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

Happy man and woman looking at the share price on a tablet.
Technology Shares

Bell Potter names the best ASX tech shares to buy

There's a lot to like about these tech shares according to the broker.

Read more »

Five happy friends on their phones.
Technology Shares

Analysts say these ASX tech shares are buys in December

Here's why these three shares have been named as buys.

Read more »

Happy woman and man looking at an iPad.
Technology Shares

2 ASX tech stocks you'll be glad you bought when the bull market starts

I reckon grab these technology shares now and watch the rising tide take them to the top.

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
Technology Shares

The CEO of this ASX 200 stock just sold $6 million in shares

It's never pleasant to see a CEO offload $6 million in stock...

Read more »

A man holds up a block from falling in a row of dominos.
Share Market News

Here's how the ASX 200 market sectors stacked up this week

The ASX 200 gained 0.36% and the technology sector stood out.

Read more »

A woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.
Technology Shares

Up 40%: What on earth happened to BrainChip shares in November?

How did Brainchip shares pull off such an incredible November?

Read more »

A man in a suit face palms at the downturn happening with shares today.
Technology Shares

Why is this ASX tech stock crashing 28% on Thursday?

Investors aren't happy about this tech stock's latest update.

Read more »

A surprised man sits at his desk in his study staring at his computer screen with his hands up.
Technology Shares

The CEO of this ASX 200 share just sold $3.9m of shares

This tech stock has just reported heavy insider selling. Should you be concerned?

Read more »