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Engage: BDR Limited (ASX:EN1), a digital media and advertising company from the media and entertainment sector report a downfall in its share price post the announcement of capital raise through existing shareholders and its executive chairperson and CEOâs increased shareholding in the company.
On 23 January 2019, Engage: BDR Limited received a commitment from the professional and sophisticated investors for raising $702,784 through by issuing 25,099,423 new fully paid ordinary shares at an issuing price of $0.028 per share. The placement of the new fully paid ordinary share is as per the ASX Listing Rule 7.1A and will execute in a few days.
The fund raised through the issue of new fully paid ordinary share will be used for funding the payment of revenue generating publisher payments and working capital requirements.
At the same time, EN1 also announced that Ted Dhanik who is the CEO and the chairperson of the company increased his shareholding in the company by 19.99% which is the maximum limit as per the law. He will now be holding 57,681,498 shares of the company. Since co-founding the company in 2009, Ted has maintained his 100% of his shareholding.
Based on this, the company will soon release its Appendix 3B and form 604 Notice of change of interests of the substantial holder in respect of the acquisition with the detail information.
Since the official listing of EN1 on ASX, there is a series of negative performance till last one-year. However, its YTD performance is 240%.
As per the half-yearly results of EN1 for the period ended 30 June 2018, the company made a net loss of $4,226,445. The balance sheet of the company is in a poor state with a net liabilities of $1,648,953 indicating a weak financial position during the period. The current asset position and total current liabilities position of the company states that the company is not even in a place to meet its working capital requirement and also clear its short-term obligations. An increased accumulated loss during the period represents a weak operating performance during the period. The net cash and cash equivalent with EN1 by the end of the half year were $ 1,529,912.
On 22 January 2019, the closing price of the share was A$0.051. Post the announcement, the share price of EN1 reports a downfall in its share price by 29.412%. It appears that the investors might feel that the company might have taken a better strategic approach while raising capital from the existing shareholders. It might also be possible that investor might have started selling their current shares. They might feel that the shares were overpriced, as per the announcement where the existing shareholders were issued shares at A$0.028. They might sell the existing shares at the high price and buy the shares at a lower price thus making a profit as well.
By the end of the trading on 23 January 2019, the closing price of the share was A$0.036 which is 0.015 points below its previous trading dayâs closing price. The closing price lies towards the 52 weeks low price with the stock holding a market capitalization of A$14.72 million.
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