Tech: 5G Networks joins in the funding boom with $18.2m raise, shares rally
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Data centre operator 5G Networks (ASX:5GN) has joined the boom in equity capital markets (ECM) activity, with the announcement of an $18.2m raise this morning.
The placement was oversubscribed from “a broad range of new and existing institutional investors”, 5GN said.
At $1.23 per share, the offer was priced at a 12 per cent discount to yesterday’s closing price of $1.35.
The company was able to lock in additional capital at a material premium to the pandemic lows in March, when 5GN shares bottomed out at around 60 cents.
The latest raise follows a previous funding round in April last year, when 5GN raised an additional $8m at 80c per share.
5GN said it plans to use the extra capital to expand its existing fibre infrastructure networks in Sydney and Melbourne, along with “new builds in Brisbane and Adelaide focused on CBD demand and key data centre locations”.
The company said it will also continue its growth-by-acquisition strategy, as it pursues opportunities to vertically integrate its data centre network to encompass data transmission and cloud storage capabilities.
5GN said its also well positioned for further volatility in the post-COVID environment, with the bulk of its revenues derived from recurring contracts.
Despite the discounted raise price, markets approved of the additional capital buffer and sent shares in 5GN more than 10 per cent higher in morning trade to new 2020 highs above $1.40.
Looking ahead, 5GN projected that core earnings for the 2020 financial year will come in at between $6m-$6.3m, with improved net earnings margins of more than 12 per cent.
Buy now, pay later platform Sezzle (ASX:SZL) continued its impressive rally, after releasing an update earlier this morning. After booking record quarterly and monthly user growth in Q1 and April respectively, the company said May results are expected to be higher again. Shares in SZL rose by another 10 per cent in morning trade to $3.62, and the stock has now rallied more than 900 per cent from its March low of 35c.
And embattled payments provider iSignthis (ASX:ISX) has announced that it now meets certification requirements from the Central Bank of Lithuania to process transactions up to €100,000. The company also said it’s been re-certified in accordance with information security standard ISO / IEC 27001.
ISX has been suspended from trading on the ASX since October, when concerns were raised about the company’s reported revenue streams which unlocked lucrative share bonuses for company executives.