Having rocketed nearly 150% higher over the past week after a big share overhang was cleared, shares in PCG Entertainment Plc (LON:PCGE) came down to earth today, dropping 36% as it used the boost to raise an extra £750,000 through a discounted placing.
The online media and entertainment company said its broker, Beaufort Securities had placed around 535.714 mln new ordinary shares at a price of 0.14p each.
In late afternoon trading, PCGE shares were down 0.0925p at 0.1625p.
The group said the proceeds of the placing will be used for general working capital purposes.
PCGE’s chief executive, Nick Bryant, said: "This sale provides the working capital the company needs to realise the opportunities we have created over the past months.
“I look forward to up-dating the market on these opportunities in due course."
Overhang gone …
The placing comes a day after the firm revealed that a stock overhang created by its decision to draw a line under its ill-fated purchase of Center Point Development Corp (CPDC) was finally cleared with two tranches of share sales which gave PCGE net proceeds of approximately £0.42mln.
The group revealed yesterday that Beaufort had completed the sale of around 402.589 mln ordinary shares on behalf of the CPDC purchasers, equivalent to 30.06% of the AIM-listed firm’s share capital.
PCG said those shares were sold to multiple investors, none of which now hold notifiable stakes in the company.
Bryant had said: "This concludes the disposal on a very positive note, and brings additional funding into the Company.”
The Asia-Pacific company revealed it had opted to sell the CPDC subsidiary on January 11 after a dispute between the unit’s vendors and its major supplier.
The company sold CPDC to a consortium of investors, some of whom are existing shareholders of PCG, while others are thee previous owners of the company.
PCG purchased CPDC in August 2015, shelling out 114.8mln shares plus US$410,000.