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There won’t be any movement from the Appen Ltd (ASX: APX) share price on Tuesday.
That’s because the struggling artificial intelligence (AI) data services company requested a trading halt before the market open.
Appen you have requested the halt until the market open on Thursday.
Why is the Appen share price halted?
Unfortunately for Appen’s long-suffering shareholders, it appears that its most recent equity raising was not enough.
In June, the company announced a fully underwritten ~$60 million equity raising to support its strategic refresh and return to profitability.
However, it seems that the return to profitability isn’t on the cards in the near term and more money is required to keep the lights on at Appen HQ.
While no details have been released to the market at the time of writing, the AFR It is reported that the company is seeking to raise another $25 million from investors via a placement and rights issue.
The last equity raising was undertaken at $1.85 per share. But Appen will be lucky to get a price half that in its latest funding round. As of yesterday’s close, the Appen share price was fetching 95 cents.
Given how much its shares have fallen since the last raising equity, generating big paper losses for those who took part, it seems quite likely that a major discount would need to be offered to get enough interest in this one.
This could mean somewhere in the region of 80 cents per new share. This is a level the Appen share price has not been seen since all the way back in 2015. It is also a world away from its 2020 high of circa $40.00.
The Appen share price is down 64% over the last 12 months.