Why is the Weebit Nano share price sinking 12% today?

This tech stock is taking a beating on Friday. What's going on?

| More on:
A frustrated male investor frowns with his hands and arms open asking why the share price has dropped today.

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

Key points

  • Weebit Nano shares are being hammered on Friday morning
  • This has been driven by the company raising capital
  • It has raised $45 million from institutional investors at $5.00 per new share

The Weebit Nano Ltd (ASX: WBT) share price has returned from its trading halt and sunk deep into the red.

In morning trade, the semiconductor company's shares are down 12% to $4.89.

Why is the Weebit Nano share price sinking?

The weakness in the Weebit Nano share price has been driven by the company undertaking and completing an institutional placement.

According to the release, the company has raised $45 million via fully underwritten institutional placement at a 9.7% discount of $5.00 per new share.

Management advised that the proceeds of the offer will fund the further development and commercial roll-out of Weebit Nano's ReRAM technology. It also expects it to support further development to solidify its competitive advantages in both the embedded and discrete markets.

In addition, management notes that the funds will allow Weebit Nano to capitalise on the significant opportunities within the Non-Volatile Memory (NVM) market as it progresses its commercialisation strategy with leading global foundries and potential customers.

The company will now seek to raise a further $10 million from retail investors at the same price via a share purchase plan.

Management commentary

Weebit Nano's CEO, Coby Hanoch, commented:

The strong level of support shown by new and existing sophisticated and institutional investors in Australia and offshore reflects our technical progress over the past year and the significant market opportunities for our proven innovative memory technology. We are delighted to welcome new institutional investors to our register from Australia and offshore, and take great pride that these experienced technology investors are supporting Weebit's ground-breaking technology.

Hanoch appears optimistic that the funds raised will be a big boost to its future plans. He adds:

Our first ReRAM product is now available to customers through SkyWater Technology, and we are in advanced discussions with most of the world's leading fabs and integrated device manufacturers. Funds raised, combined with our strong balance sheet of approximately $45 million cash at the end of December 2022, ensure we are well-placed to transfer and qualify our ReRAM technology in Tier-1 fabs and foundries to capitalise on the growing global need for faster, better performing memory technology. Our ReRAM has already demonstrated it is able to scale to smaller geometries for more advanced applications, and has significant competitive advantages over both the existing memory technology and other emerging players.

Time will tell if this is another meme stock like Brainchip Holdings Ltd (ASX: BRN), or something with more substance.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Scott Phillips.

More on Technology Shares

Man with rocket wings which have flames coming out of them.
Technology Shares

Guess which ASX All Ords share is rocketing 16% on an asset sale

This share is catching the eye with a very big gain on Friday. But why is it rising?

Read more »

a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the Pilbara Minerals share price continue to fall
Technology Shares

Why are Megaport shares sinking 14% on Friday?

Why are investors hitting the sell button? Let's find out.

Read more »

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Why today is a big day for this ASX 200 AI stock

This company stands to benefit from 'one of the most profound transformations in the history of technology'.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

Why are WiseTech Global shares crashing almost 20% today?

Recent controversy has led to delays to an important launch and hit its revenues.

Read more »

Woman with speaker
Technology Shares

After falling 62%, this leading ASX 200 share could be gearing up for growth!

This industry-leading company looks like a turnaround opportunity to me.

Read more »

A man has computer-generated images rushing through his head indicating an AI (Artificial Intelligence) concept of a communication network.
Technology Shares

ASX investors are obsessed with Nvidia shares! Here's why

The global chipmaker reported a 94% increase in annual revenue in the third quarter.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Technology Shares

Own WiseTech shares? Here's what to watch at Friday's AGM

This could be one of the major events of the year.

Read more »

Woman and man calculating a dividend yield.
Technology Shares

This ASX tech stock is down 93% from its highs. Could Trump tariffs give it a boost?

The ASX tech stock could enjoy tailwinds from Trump’s threatened tariffs.

Read more »