The 4DS Memory (ASX:4DS) share price is plummeting 11% today. Here's why

What's moving the memory storage company's shares?

| More on:
Man in business suit above the clouds plummeting downwards back first

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The 4DS Memory Ltd (ASX: 4DS) share price is one of the worst performers on the ASX today. This comes after the memory storage company announced its capital raising efforts and came out of the trading halt it had been in since Tuesday.

At the time of writing, 4DS Memory shares are down a sizeable 11.86% to 5.2 cents. In the past month alone, its shares have been hit hard by investors, falling a massive 60%.

What's happening with 4DS Memory?

A catalyst for the steep dive in the 4DS Memory share price today is possibly the fear of an impending share dilution.

According to its release, 4DS Memory has received firm commitments to raise $2.5 million through a share placement.

The offer was presented to both domestic and international institutional investors at an issue price of 4.8 cents apiece. This equates to roughly 52 million new ordinary shares being added to the company's registry.

In addition, 4DS Memory will offer a share purchase plan (SPP) to existing shareholders to raise a further $2.5 million. The SPP will be offered on the same terms as the placement.

The lead manager, Mac Equity Partners International, will also receive 5 million options exercisable at 8 cents each. This will expire within 2 years from the date of issue.

The funds received from the equity raise will be used towards supporting a number of growth initiatives for the company. This includes:

  • Research and development costs;
  • Working capital; and
  • Expenses of the offers such as the 6% lead manager fee.

The closing date of the SPP offer is set for 14 December, with issuance of the shares on 16 December.

About the 4DS Memory share price

The start of 2021 saw the 4DS Memory share price shoot higher until the end of January, which was followed by a sideways channel.

Although, since mid-August, it has been on a continuing decline, posting a 12-month loss of roughly 65%.

4DS Memory has a market capitalisation of around $67.43 million, with more than 1.32 billion shares on its books.

Motley Fool contributor Aaron Teboneras owns shares of 4DSMEMORY FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Technology Shares

Here are 2 exciting ASX shares rated as buys

These shares are highly rated by brokers. Let's find out why.

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
Technology Shares

Is this the decade of the data centre? One ASX 200 stock that could benefit

Let's see why one leading broker thinks this stock could be destined for big things.

Read more »

A human-like robot checks out market performance on a laptop, indicating the rise of AI shares.
Technology Shares

3 top performing ASX AI shares for your watchlist

Have you positioned your portfolio to capitalise on the next tech revolution?

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
AI Stocks

3 reasons to buy NextDC shares today

A leading expert forecasts more growth to come for NextDC's rebounding shares.

Read more »

A share market analyst looks at his computer screen in front of him showing ASX share price movements
Technology Shares

Why this $3.9 billion acquisition makes Xero shares a buy today

A leading expert forecasts that Xero’s $3.9 billion investment is about to pay off.

Read more »

Three young people in business attire sit around a desk and discuss.
Small Cap Shares

Tiny tech: 3 ASX small-cap shares with new ratings

Toby Grimm of Baker Young and Peter Day of Sequoia Wealth Management share their new ratings.

Read more »

Smiling young parents with their daughter dream of success.
Technology Shares

Could Life360 shares rise to $37.50?

Bell Potter has given its verdict on this tech stock.

Read more »

Man smiling at a laptop because of a rising share price.
Technology Shares

Investors should put these 2 top ASX tech shares on the watchlist

Looking for growth? These two stocks are delivering.

Read more »