Vection Share Price Pops 8% Higher on Expansion Plans (ASX:VR1)

It’s been a busy couple of weeks for Vection Technologies Ltd [ASX:VR1]. A software company that specialises in virtual and augmented reality solutions.

The VR1 share price more than doubled from 17 to 29 September.

You can read all about that in our previous coverage, right here.

Today though, after a brief correction, the VR1 share price has popped up again. Reclaiming some of the lost gains from the past few days. Coming out of a trading halt to break some big news.

Indeed, it seems Vection has some big plans ahead. So, let’s get stuck into it.

More money for more growth

First and foremost, the big news was a fresh $6 million share placement.

The funds were raised exclusively from sophisticated investors. Which included the likes of HTC Vive, a VR hardware, and even the Italian government.

That’s some pretty diverse coverage. Which isn’t a bad thing.

However, for everyday investors, the bad news is that they’re unlikely to see a similar offer. Vection made no mention of extending this share placement to retail shareholders.

At least this money should help the company deliver on its growth goals though. Which in the long run should benefit everyone involved.

Vection’s Managing Director Gianmarco Biagi certainly believes so:

We are pleased with the strong level of support from existing and new institutional and sophisticated investors.

The placement represents a strong platform to pursue Vection Technologies’ global growth strategy, aligned with the 6-months objectives. The company’s management remain committed to the long-term creation of value for all of its stakeholders.

As part of that long-term value and objectives, Vection will also turn its focus to Australia and the US. Looking to accelerate their presence in these markets alongside their European operations.

They have certainly set some lofty goals. But, with this new capital they should be well equipped to make something happen.

What’s next for VR1 shareholders?

Now, all this goal setting and capital raising is great. But, for shareholders the big question still remains on how and when Vection will start delivering substantial revenues.

With a market cap of over $114 million, Vection managed to achieve just $3.1 million in revenues for FY20. A fairly paltry sum for a stock of this size.

However, that is somewhat to be expected. Vection operates like, and for the most part is, a start-up. Albeit, with a few years of experience under their belt.

That’s why the challenge for this company is to prove they can make more sales. A lot more…

Hopefully, with this new money and plan they will be one step closer to making that happen.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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