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Why the PointsBet (ASX:PBH) share price is crashing 12% lower on Tuesday
PointsBet shares are tumbling on Tuesday…
James Mickleboro has been a Motley Fool contributor since late 2015. After studying economics at university back home in the United Kingdom, James came to live in Australia and managed to land a job at an Australian fund manager. This was the start of a love affair with Australian equities and he hasn t looked back since. James is part of the CFA Institute s Chartered Financial Analyst program and hopes it teaches him how to become an astute investor which allows him to help others with their own investing. Outside of reading and researching he spends many a late night watching the English Premier League and Seinfeld reruns.
PointsBet (OTC:PBTHF) said today it’s raising $294.17 million in capital to fund expansion in the rapidly growing US market.
A PointsBet sportsbook is pictured above. The Aussie company is raising capital to fund US expansion. (Image: PointsBet Blog)
The Australian sportsbook operator is selling equity through a placement of new shares and a rights issue. Goldman Sachs and MST Financial are managing the transaction. As is par for the course with capital raises of this nature, the share sale is occurring at prices below market value.
For example, the private placement is priced at A$10, a more than 11 percent discount to PointsBet’s Wednesday closing price. The entitlement sleeve, which will raise $136 million, is priced at A$8. The private placement is geared toward institutional investors, while the entitlement transaction is for the operator’s smaller retail shareholders.