NetCapital (NCPL) stock plummeted on Thursday after the financial technology company announced a registered direct offering for its shares. The offering is priced at the market, with each share of NCPL stock set at $7. 714,286 shares are included in the offering, and a concurrent private placement includes 714,286 warrants for NCPL stock with an exercise price of $6.88 each.
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NetCapital will raise $5 million from the registered direct offering, with another $4.9 million possible with the full exercise of warrants. It intends to use the money for “repayment of certain outstanding promissory notes and for general working capital purposes.”
NCPL stock was down 29.11% in pre-market trading on Thursday, following a 2.2% drop yesterday. However, the shares have rallied 306.25% year-to-date and 18.35% over the past 12 months. Today’s drop is likely due to the lower warrant exercise price and the dilution of current shareholders’ stakes.
Is NetCapital Stock a Buy, Sell, or Hold?
Turning to Wall Street, the coverage of NetCapital is lacking. Even so, TipRanks’ AI analyst Spark has the stock covered. Spark rates NCPL a Neutral (54) with a $2.50 price target, suggesting a 70.41% downside for the shares. It cites “significant financial challenges with declining revenues and profitability” as reasons for this stance.
