Monitise Plc (MONI) lost almost a tenth of its market value after the U.K. technology company said it plans to raise 100 million pounds ($160 million) by issuing new shares to capitalize on the popularity of mobile payments.
The stock declined 9.9 percent to 29.75 pence, giving the company a market value of 341 million pounds. About 34 million shares were traded, more than seven times the three-month daily average.
The company said late yesterday it will issue about 333 million shares at a price of 30 pence each and use the cash to boost services for mobile banking and mobile commerce. Monitise said it agreed to buy control of Mobile Money Network Ltd. in a 15 million-pound transaction that values the business at 30 million pounds, and to acquire eMerit Solutions Ltd., a mobile payments acceptance business.
“Proceeds from the placings are expected to drive substantially increased revenue expectations over the next two to five years and lead to only a slight delay in near-term profitability,” according to Monitise. The company may apply next year to move from the AIM market to London’s main exchange.
The value of payments and transfers initiated by Monitise is more than $25 billion a year, up from $1 billion a year ago, the company said. Among its partners in developing services are Visa Inc., which has a stake in Monitise, and BlackBerry maker Research in Motion Ltd. Monitise said revenue will probably triple to at least $110 million in the current fiscal year.
Canaccord Genuity Ltd. has agreed to underwrite the “firm placing” of 144.1 million shares in full, while a conditional offering for the rest of the stock is subject to shareholder approval at a general meeting on Dec. 21, the company said.
Of four analysts who provided data to Bloomberg this year on Monitise, all recommend buying the stock.
“Monitise continues to expect that group user-generated revenues, which have a higher gross margin, will grow as a percentage of overall revenues as an increasing number of services enabled by Monitise for its clients are deployed,” the company said.
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