The PlaySide Studios Ltd (ASX: PLY) share price has come out of a trading halt today following the company's successful placement.
PlaySide Studios shares rocketed out of the gate this morning 14% higher than yesterday's close and have been flying around the green ever since. At the time of writing, the video game developer's shares are up 2.87% to 89.5 cents. It's worth noting that PlaySide shares touched an all-time high of $1 during morning trade before some profit-taking occurred.
Let's take a closer look at the details regarding PlaySide Studios' latest announcement.
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Why are PlaySide Studios shares soaring?
A catalyst for PlaySide Studios shares hitting a record high is likely investor excitement about the company's growth plans.
According to its release, PlaySide Studios advised it has received binding commitments from an array of institutions to raise $25 million. The strong support for the placement primarily came from institutions and sophisticated investors.
The placement will see around 33.33 million new ordinary shares created at an issue price of 75 cents apiece. This represents a 13.8% discount to the last closing price of 87 cents per share on 12 November 2021.
In addition to the placement, PlaySide Studios announced a share purchase plan (SSP) to raise a further $3 million from eligible shareholders. The issue price was listed as the same offered in the placement.
The proceeds from both the placement and SPP will be used to deliver a number of strategic objectives:
- Original intellectual property, licensing, and work-for-hire focusing on PC and next generation consoles
- Invest in new studio locations across Australia and team expansion over the next 18 months
- Establish a dedicated R&D team to pursue blockchain gaming and its linkage to the metaverse
PlaySide Studios CEO Gerry Sakkas commented:
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.
About the PlaySide Studios share price
Over the past 12 months PlaySide Studios shares have gained 183%. They are up by more than 91% year to date.
Based on the current price, PlaySide Studios commands a fully diluted market capitalisation of $319 million. The company has approximately 105.32 million shares outstanding.
