The Dubber Corp Ltd [ASX:DUB] the share price is down 7% at time of writing, following a $ 110 million capital increase announcement.
DUB shares fell quite sharply today, as you can see in the chart below:
The announced $ 110 million fundraiser comes after the cloud-based call recording and voice intelligence service released its June quarterly results yesterday.
A successful fundraiser of $ 110 million
Today, Dubber revealed that it has received firm commitments for a two-tranche, fully guaranteed placement of new fully paid common stock from institutional investors in Australia and overseas.
DUB plans to raise $ 110 million before fees at a price of $ 2.95 per share.
The detail of the two installments is as follows:
- ‘Tranche 1 of the Placement of 33,086,809 shares will be issued in accordance with the Company’s investment capacity under ASX Listing Rule 7.1, and is expected to be settled on Friday July 30, 2021.
- ‘Tranche 2 of the Placement of 4,201,327 shares will be issued subject to and subject to shareholder approval at a general meeting scheduled for Thursday, September 2, 2021 and for which settlement is scheduled for the following day.‘
Dubber noted that the interest in the capital increase was’largely in excess‘funds that the company sought to raise.
Dubber’s quarterly results in June
Here are the highlights from DUB’s latest quarterly:
- Revenue increased 12% ($ 800,000) to $ 7.4 million
- The total number of users exceeds 420,000
- Annual recurring revenue increased 14% ($ 4.8 million) to $ 39 million
- Over $ 32 million in cash
While Dubber was able to increase revenue this quarter, it was at a slower pace than posted in the March quarter.
As we saw at the time, DUB’s revenue grew 54% in the March quarter while ARR grew 20% quarter over quarter.
Dubber ended the June quarter with a net loss of cash from operating activities of $ 5.85 million out of $ 6.73 million from customer revenues.
The company recorded $ 6.55 million in cash flow from operations during the March quarter.
Since the start of the year (12 months), DUB has recorded a net loss of cash from operating activities totaling $ 18.06 million.
What’s next for Dubber’s share price?
The annual recurring revenue of $ 39 million may not seem like much compared to Dubber’s current market cap of around $ 765 million.
That’s a fairly high price / sales ratio north of 60. For reference, another growth stock – Afterpay Ltd [ASX:APT] – has a price / sell ratio of 45.
But the high market cap may suggest that investors are anticipating a lot of future growth for Dubber.
The recent collapse, however, may suggest that the market is reassessing Dubber’s valuation. For example, DUB stock is currently down 11% from its 52 week high.
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