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News & Analysis

Kogan.com shares soar after raising $100 million

- June 11, 2020 2 MIN READ
Kogan.com
Kogan.com founder and CEO Ruslan Kogan
Kogan.com shares have jumped more than 11% in early trade on Thursday morning after the online retailer announced it had successfully raised A$100 million in an institutional placement on Wednesday.

Within 30 minutes of trade resuming today, shares in the multi-pronged ecommerce business (ASX: KGN), had climbed to $13.79, up from Tuesday’s closing price of $12.38.

The company called a trading halt on Wednesday morning to announce the placement, which saw around 8.7 million new shares, representing 9.2% of the company’s existing issued capital, snapped up by institutional investors at $11.45 each – a 7.5% discount to Tuesday’s closing price.

Kogan.com’s share price has more than doubled over the past three months, having hit a low of $3.79 in mid-March.

The company will now proceed with raising an additional $15 million share purchase plan for existing eligible shareholders, offering them up to $30,000 worth of new shares each, also at $11.45.

Chief executive and founder Ruslan Kogan is building up a war chest with an eye to snapping up rival retail brands struggling during the covid-19 lockdown. His business empire has boomed over the last two months with gross sales per customer doubling April and May compared to 12 months ago. Kogan.com bought the designer copy furniture brand Matt Blatt last month and in a statement yesterday, Kogan said “We are now in a better position than ever to take advantage of growth opportunities.”

The cash stockpile will be used “broaden the company’s offering, expand its customer base or enhance its operating model”.

Kogan.com chairman, Greg Ridder said there was strong support from existing shareholders for the capital raising, alongside overwhelming interest from new investors.

“We recognise the significant trust placed in our management team to deliver a strong return on your capital, and we have every confidence the team will rise to the challenge,” he said.

“To all our shareholders, your company has gone from strength to strength since listing and, with the capital we have raised this week, your company is now stronger than ever.”

In its statement to the ASX today announcing the raise, the company said it reserves the right to increase the size of the SPP Offer at the discretion of the Kogan.com.

Kogan.com listed on the ASX in 2016 at $1.80 a share for a market capitalisation of $168 million. Today its market cap sits at around $1.3 billion.