Huddled Group PLC (AIM:HUD) shares tumbled 36.5% to 0.54p after it raised £1.24 million through a share subscription as the circular economy e-commerce group looks to increase stock, step up marketing and move towards positive operational cash flow.
The shares were issued at price of 0.4p, a 53% discount to Huddled’s closing mid-price on 29 June.
The AIM-listed company, which sells surplus products via digital platforms such as Discount Dragon, Nutricircle, and Boop Beauty, said it had received firm commitments for 311 million new shares, with executive chairman Martin Higginson subscribing for £175,000 through his family investment company, M Capital Investment Partners.
Existing shareholders will also be able to participate on the same terms through a RetailBook offer of up to £100,000, which is expected to complete on 1 July.
Huddled said the proceeds would be used to broaden its surplus product range, increase marketing through TV, radio and digital media, and strengthen working capital.
The board said the funds raised should be sufficient to allow the group to become operationally cash flow positive.
The company said it had spent the past six months improving unit economics, making next-day delivery standard and securing an 'Excellent' Trustpilot rating from more than 35,000 reviews.
Higginson said the fundraise gave Huddled "the fuel to accelerate revenue growth and delivers a clear pathway to profitability". He added that the company would also move into live shopping across TikTok, WhatNot and eBay Live.
** UPDATE: Adds share price reaction **
