ASX Capital Raise Roundup: Fighting inflation the Dalio way – with some retail therapy

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ASX Capital Raise Roundup is a fortnightly look at ASX capital raisings.

Inflation. It’s been dead for the past 20 years – only to arrive with vengeance!

What’s more, there are two generations of investors who have never dealt with this type of phenomenon. The traditional playbook calls for buying commodities, property, and other hard assets.

However, our trading sense tells us it will not be quite that simple. In an effort to gauge how other investors are shifting their portfolios, star hedge fund manager Ray Dalio of Bridgewater Associates is buying various retailer companies – likely based upon these businesses’ abilities to raise prices and increase gross margins.

We are also seeing renewed interest in banking companies which also should have the pricing power to increase their net interest margins.

Anecdotally, these portfolio moves make sense to us as we are now regularly paying $5.00 for cafe lattes, $1.75+ per litre of fuel, and mortgage rates are creeping higher.

These are still early days if there is indeed a full paradigm shift, and we will certainly be on board this new trend.

Placements this week

PlaySide Studios Limited (ASX:PLY) has raised $25m through a placement and is aiming to raise a further $3m through a SPP. The funds will be used to support their investments in Original IP Titles, new licence opportunities and to further scale the companies work-for-hire-business.

The price of the raise was 75c per share representing a 14% discount to the close prior to the raise.

PlaySide CEO Gerry Sakkas said: “We see an opportunity to accelerate the implementation of our growth strategy, solidifying our position as Australia’s leading independent gaming developer. The recent agreement with 2K Games has recognised our capabilities and highlighted the opportunities to grow within our target market.

“We are in a position to capitalise on this momentum to further expand our original IP titles, new licenses, work-for-hire as well as scale our operations and team to cater for these planned investments.”

West Wits Mining Limited (ASX:WWI) has completed a small placement and will conduct an underwritten rights issue to raise a total of $9.3m. The 1:6 non-renounceable rights issue has been underwritten by our good friends at Evolution Capital.

West Wits is primarily a gold explorer and developer with mining tenements positioned in South Africa and Western Australia. Its main project is in the Witswatersand Basin which is located in Johannesburg, South Africa.

Funds from the raise will be applied toward a new early mining initiative, mine development and exploration activities. Funds will also be applied to a Stage 2/3 feasibility study for WBP, future exploration at WBP and Mt Cacelia Projects and General Working Capital.

ActivEX Limited (ASX:AIV) has raised $2.1m through a heavily oversubscribed placement at 8c per share. Every 2 shares subscribed came with 1 free option with an exercise price of 12c.

180 Markets had a huge amount of interest in the raise, and we thank the Lead Managers, Cadmon Advisory and Panthea Capital for our early participation.

Prior to the raise the company announced potential lithium bearing structures on its existing tenements that it proposes to explore using capital from the placement. The company had been reviewing its North Queensland projects with a view to explore it for metals such as lithium, tantalum, niobium, tin, tungsten and rare earths which are expected to have high demand going forward in the new zero carbon industries.

Given the lack of liquidity in the stock prior to the raise it will be interesting to see how the stock performs following the trading halt.

ICandy Interactive Limited (ASX:ICI) has raised $40m through a funding round cornered by Animoca Brands and other top-tier institutional investors. The two-tranche placement was priced at 11.5c per share which represented an 11% premium to the 15-day VWAP prior to the raise.

Animoca Brands, which used to be listed on the ASX, recently raised funds at a $2.2b valuation which is almost 10x higher than the valuation it was trading at on the ASX before de-listing.

Shaun Factor, co-founder of 180 Markets said: “It’s great to see ICandy attracting investors of such calibre as Animoca Brands. Anytime you see a placement being done at a strong premium is an extremely positive sign. Well done to the gents at Evolution Capital for organising this raise.”

Nexion Group Ltd (ASX:NNG) has raised $2.75m through a share placement managed by Cadmon Advisory at 16c per share. Nexion is a leading provider of enterprise ICT solutions including public, private and hybrid cloud.

Nexion has recently experienced a significant increase in sales and is expecting this to continue, requiring replenishment of the companies working capital following the acquisition of Blue Sky Telecom of $2m.

NEXION founder and CEO, Paul Glass commented: “In August 2021, NEXION completed the highly accretive acquisition of Blue Sky Telecom for a relatively modest cost of $2.0 million. Blue Sky Telecom Pty Ltd added $3.4 million in annual recurring revenue to the group and provided the additional technicians needed to deliver the growing pipeline of work we had sold in the past three quarters. This represented an extremely attractive acquisition for NEXION but required us to use a material portion of the Company’s cash balance raised at the IPO earlier this year.

“NEXION’s growth has been outstanding, posting record quarterly revenue in Q1 of FY22 and increasing the recurring revenue base by almost 300% in just three quarters since IPO.”

Lion Energy Limited (ASX:LIO) raised $9.6m through a capital raise priced at 8c per share. Funds from the raise will be applied towards working capital and exploring other opportunities.

Existing shareholders and directors will also participate via way of Convertible Note that will require approval post the meeting at the end of the year. The shares are currently trading disappointingly below the issue price of the placement, despite allotment not occurring yet, which is obviously extremely upsetting for everyone that participated in the capital raise.

TinyBeans Group Ltd (ASX:TNY) has raised $8m through a two-tranche capital raise from existing and new institutional and sophisticated investors. The raise was priced at 60c per share and was managed by Bell Potter Securities.

The company will also conduct a SPP to allow existing shareholders to participate. The SPP will intend to raise another $500,000 for TinyBeans.

Tinybeans continues to see material growth in its underlying business with proceeds from the placement to assist in additional product development, marketing, general working capital purposes, and acceleration of Beanstalk, the company’s new subscription product; and as part of the capital raise, CEO, Eddie Geller, plans to convert his director loan of US$300k (plus interest accrued up to the completion date of tranche 1 of the placement) to shares at the same issue price paid by investors under the placement. To be approved at the upcoming AGM.

Thinking about taking the IPO leap?

Hitting the bourse this week

It was a mixed week on the IPO front. There were six new companies that hit the bourse in volatile fashion. Strong performers were Evolution Energy Minerals (ASX:EV1) which is currently trading at 50c compared to its 20c IPO price.

Another solidly strong performer was Lycaon Resources (ASX:LYN) which was lead managed by Canaccord Securities. The 20c IPO tripled on day one of trading and is holding onto its gains extremely well.

By far the worst IPO we have seen in a while was Tissue Repair Ltd (ASX:TRP) which raised money at $1.15 per share and is currently trading at just 70c per share. This is almost a 40% loss on just its second day of trade.

Unfortunately, investors are going to need a lot of those tissues if this performance continues (please note, we are not being dirty).

We are eagerly awaiting the debut of Ventia Services Group Limited (ASX:VNT) today. Here at 180 Markets, we received a huge amount of interest in VNT. Cooper Metals Limited (ASX:CPM) is also expected to list today, finally after a long and delayed process.

Listing next week

Next week there are 7-10 companies that are expected to list. Popular on 180 Markets were Radiopharm Theranostics Limited (ASX:RAD), Nimy Resources Limited (ASX:NIM) and Orange Minerals (ASX:OMX). We wish all investors who participated in these IPOs the best of luck with their new investments.

180 Markets’ recent performers

180 Markets was established by investors for investors, and has become Australia’s leading deal sharing platform, with a difference. In just 12 months, 180 Markets has established a 1800+ strong investor base that has enjoyed access over 650 placements on the ASX, including more than 30 placements where 180 Markets has been lead manager.

If you are interested in Placements, IPOs and RTOs sign up at www.180markets.com.au

This article was developed by 180 Markets, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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