The Appen Ltd (ASX: APX) share price started the day well inside the green, rising 5.05% to an intraday high of $2.29 shortly after the market open.
The share price bump followed the company releasing the results of its recent Share Purchase Plan (SPP).
However, the Appen share price has since retreated and is currently down 1.8%, trading at $2.14.
Appen shares are mirroring the path of the broader S&P/ASX 200 Index (ASX: XJO) on Thursday.
The ASX 200 also began the day strongly, up 0.38% shortly after the open. However, it turned quickly and is now down 0.24%.
ASX tech shares are performing better than most other market sectors on Thursday. The S&P/ASX 200 Information Technology Index (ASX: XIJ) is currently up 0.15%.
This follows a 2.93% increase in the Nasdaq Composite Index (NASDAQ: .IXIC) overnight.
Tesla Inc (NASDAQ: TSLA) shares surged 14.75% following Republican Donald Trump's surprisingly decisive win in the United States Presidential election.
CEO Elon Musk was a very public proponent of Trump. There is now speculation he will become a formal advisor to the new president.
Let's look into Appen's SPP results.
Appen share price rips then dips amid oversubscribed SPP
Appen said its SPP was oversubscribed by a large margin. The company received applications for approximately $20.7 million worth of shares. This was well above the target of $5 million.
Due to this, Appen decided to increase the size of the SPP to $15 million. Each shareholder will receive a minimum allocation of 520 Appen shares (equivalent to $1,000 of new investment).
The company will conduct a pro-rata scaleback based on eligible investors' shareholdings on the record date of 10 October. Shareholders will receive their refunds shortly.
The SPP was announced on 11 October and supplements a $50 million fully underwritten institutional placement completed on 14 October.
Appen offered retail and institutional investors the chance to buy more shares at $1.92 each, which was an 11.5% discount on the last traded price at the time of the announcement.
When announcing the institutional placement, Appen CEO Ryan Kolln said the strong support received reflected the company's return to profitability on an underlying EBITDA and underlying cash EBITDA basis.
He added:
It also highlights investor confidence in our growth potential as our external environment displays continuous signs of improvement, particularly from generative AI related opportunities.
Approximately 7.8 million new Appen shares will be issued under the SPP tomorrow.
The company expects the new shares to begin trading on Monday. It will issue holdings statements on the same day.
The proceeds of the capital raise will be used as additional liquidity to fund working capital.
Management said the funds would provide greater flexibility to pursue generative AI-related opportunities.
