While the market may be falling today, one ASX All Ords stock is falling harder than most.
That stock is 4DS Memory Ltd (ASX: 4DS), which has returned from a trading halt with an almighty thud.
In early trade, the semiconductor company's shares were down as much as 25% to a 52-week low of 6 cents.
They have recovered a touch since then but remain down 17.5% to 6.6 cents at the time of writing.
Why is this ASX All Ords stock crashing?
Investors have been selling the company's shares following the release of announcement earlier this week.
That announcement revealed that it has entered into a design agreement with Infineon Technologies, which is a US-based subsidiary of German semiconductor solutions company Infineon Technologies AG (ETR: IFX).
This agreement will see Infineon provide technical expertise and resources to design a custom ReRAM memory test chip for the ASX All Ords stock, based on its requirements.
However, Infineon Technologies isn't doing this out of the kindness of its heart. This is business.
The release reveals that the initial scope of work under the agreement will be over 15 months for a total of US$4.5 million payable by 4DS. This comprises an upfront payment of US$1.5 million and the balance payable monthly at varying monthly amounts.
Either party may terminate the agreement under standard terms and conditions in any termination clause and upon termination only Infineon Technologies resources completed to the point of termination are payable.
Commenting on the agreement, the ASX All Ords stock's executive chairman, David McAuliffe, said:
We are extremely pleased to have been able to engage a large global semiconductor leader in Infineon to take 4DS to the next phase of development. The Design Agreement is a significant step forward and follows on from the successes the Company achieved in 2023/2024.
Capital raising failure
At the time of the announcement, 4DS revealed that it would be launching a capital raising this week.
However, it seems that there wasn't much of an appetite for its stock. As a result, the company has embarrassingly had to abandon its plans. It said:
After consultation with various parties, the Company has elected not to proceed with a capital raise because the offering wasn't reflective of what the Board considers is in the best interest of shareholders. The Company intends to raise capital in early 2025 to enable it to fund its obligations under the Design Agreement it has recently entered into with Infineon Technologies LLC, which will design a custom ReRAM memory test chip for 4DS. As announced previously, the funds due under the Design Agreement will be paid progressively over 15 months, being the term of the agreement.
The company plans to provide an update in January in relation to the nature and size of its planned capital raising activities.
