Kogan Shares in Trading Halt as It Seeks $115 Million for Growth (ASX:KGN)

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At time of writing, shares of Kogan.com Ltd [ASX:KGN] are in a trading halt.

Kogan is seeking $100 million to fund its growth.

After an immense run up the charts, the Kogan share price punched through resistance at $9 on the monthly which dated back to February 2018:

ASX KGN Share Price Chart - Kogan Shares ASX

Source: Tradingview.com

Here’s a quick look at the terms of Kogan’s capital raise.

Top Four ASX Stock Picks for 2020: Sam Volkering reveals his four favourite ASX stocks that he says investors should consider in 2020.

Kogan to use money on value accretive opportunities

The capital raise involves:

  • $100 million institutional placement at 7.5% discount to last close of $12.38, for an offer price of $11.45 a share
  • $15 million Share Purchase Plan, also at $11.45

So existing retail shareholders will likely be pleased that they get the same deal as institutional investors.

The CEO Ruslan Kogan said:

Our low cost of doing business and digital expertise have put us in the driver’s seat to capture market share as the retail industry undergoes significant change.

And the company intends to use the money on:

Future value accretive opportunities that broaden the Company’s offering, expand its customer base or enhance its operating model.

Which could mean more acquisitions like the Matt Blatt move.

What does the future hold for the Kogan share price?

Given that the placement comes in at a 7.5% discount, it is possible that the Kogan share price may take a small breather before continuing its run.

The online retailer is certainly capitalising on a monumental shift away from brick-and-mortar shopping.

After releasing some expectation-defying numbers in their May trading update, it makes sense to go for a capital raise after a strong run.

The next trading update may see business cool a bit, as traditional retail comes back into the frame with eased restrictions.

Finally, if you are looking for more stock ideas, get the latest report from Sam Volkering on his four favourite ASX stocks for 2020. Sam tipped Afterpay Ltd [ASX:APT] early, so he’s always worth listening to, especially when it comes to tech stocks. It’s free too. You can download that here.


Lachlann Tierney,
For Money Morning

About Lachlann Tierney

Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest…

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