Vela Technologies Announces £1.1M Fundraise at 50% Discount, Shifts Focus to Financial Services
Why we think this is bad
The 50% discount to the previous share price, significant dilution, and strategic shift into a new sector all point to a company in a weak financial position, struggling to attract investor interest. The large discount suggests low demand for the company's shares, and the dilution will significantly impact existing shareholders. While the new board members have relevant experience, the execution risk of the new strategy is high, and there are no guarantees the financial services investments will be successful.
Key Points
- £1.1 million fundraise through placing and subscription of 44 billion new shares at 0.0025p per share, a 50% discount to the previous closing price
- Jim McColl and Chris Cooke join the board as Executive Director and Non-Executive Director, respectively
- Company to change name to Caledonian Holdings PLC and shift investing policy to focus on financial services sector
- Funds to be used for investments in financial services and general working capital
Summary
Vela Technologies PLC (LSE: VELA) has conditionally raised £1.1 million (before expenses) through a placing and subscription of 44 billion new ordinary shares at 0.0025p per share, representing a 50% discount to the previous closing price of 0.005p per share. The funds will be used to make investments within the financial services sector and for general working capital purposes.
The company has also announced board changes, with Jim McColl and Chris Cooke joining as Executive Director and Non-Executive Director, respectively. The company will also change its name to Caledonian Holdings PLC and focus its investing policy on the financial services sector, moving away from its previous disruptive technology investments.