Esports Entertainment Group, Inc. (GMBL) declined in the aftermarket after announcing its price for the previously announced underwritten public offering. GMBL values at $0.94, losing more than 18% compared to Friday’s closing price. The stock closed at $1.16 at the end of the last trading session. The stock volume traded in the last trading session was around 1.06 million shares. The current market cap of the company is around $29.78 million.
GMBL underwritten public offering
On February 27, 2022, Esports Entertainment Group, Inc. (GMBL) priced its previously announced underwritten public offering of 15,000,000 shares of common stock.
GMBL has decided on an effective offering price of $1.00 for each share of common stock and each common warrant. The useful life of the common stock and warrants will be five years from the date of issue and will be exercised for $1.00 per share of common stock. Investors will buy both the common shares and warrants simultaneously, but they will be issued separately and will be instantly transferable.
GMBL further announcement
A 45-day option to acquire an additional 2,250,000 common shares and will have a choice to further buy warrants up to an extra 2,250,000 common shares that GMBL has granted. For the offering, Maxim Group LLC and Joseph Gunnar & Co., LLC are serving as book-running managers, respectively.
GMBL intends to fund working capital
Before excluding underwriting discounts and commissions and projected offering costs, they expect that the total income of the offering will be about $15.0 million in total. They anticipate that this offering will close in the first week of March. GMBL intends to utilize the total proceeds from this offering as working capital and to repay a part of its existing senior convertible note.
Conclusion
As soon as the company announced its underwritten public offering price, its stock plunged after-hours. Investors are not responding positively to the pricing offer.
