Wellchange Holdings priced a share sale at $0.15 on Thursday. The stock it was selling closed above a dollar the following day.
The company said it would sell 50 million new Class A shares at $0.15 each, raising about $7.5 million before fees, in an offering set to close on or about August 31, according to the company's announcement on GlobeNewswire. Prime Number Capital is acting as exclusive placement agent.
The free float currently stands at about 2.6 million shares. The 50 million shares being issued would be many times that number — and every new share printed makes the ones already out there worth a smaller slice of the same company. The pricing announcement gave no reason for the discount to the prevailing market.
Shares closed 45.53% higher at $1.0900 on Friday, after the pricing was announced, on dollar volume of about $19.4 million across roughly 63,000 trades. Holders who bought at that close paid roughly seven times the offering price.
An F-1 registration statement filed with the SEC sets out how the company intends to spend the net proceeds: 30% for business expansion and operational scaling, with the rest split among sales and marketing, research and development, strategic investments, and working capital.
Short volume on Friday came to 56.5% of reported trading — bets against the stock accounted for more than half of all activity on the session. The free float is about 2.6 million shares, and 6.6 million shares traded short, meaning short volume alone was more than twice the size of the float.
The SEC declared the registration effective on August 27, the day before the pricing was set. Once the offering closes, the new shares will outnumber the existing float by a wide margin.