Online freelancing platform Airtasker Ltd [ASX:ART] share price is up 11.11% at time of writing. Surging after coming out of a trading halt since Thursday.
A big move for the small-cap, which only listed on the ASX two months ago.
Indeed, the reason for the trading halt relates to a big move as well. Airtasker has finalised a capital raise in order to fund a US takeover, giving them the opportunity to take their business global.
Let’s delve into the details…
Fresh funding, fresh targets
As Airtasker declared this morning, it has finalised a $20.7 million share placement. Raising the funds via a $1.00 per share offering to sophisticated and institutional investors.
This capital will help the company complete its proposed takeover of Zaarly. A US-based platform that also operates in the online freelancing ecosystem. Thereby giving Airtasker a quicker means to capture new markets in the US.
On top of that, Airtasker notes that it’s also looking to expand into the UK as well. Aspirations that will hopefully drive further engagement and revenues.
For shareholders it clearly indicates an aggressive growth mindset. Which is obviously desirable for a company of Airtasker’s size, the only question that may arise is whether access to capital will become an issue.
After all, this $20.7 million placement comes just two months after Airtasker’s $83.7 million IPO.
So if this trend continues, retail investors could see some heavy dilution of their holdings. A concern that could impinge on this growth narrative, and potential returns.
But as today’s share price actions shows, for now that isn’t a big concern. With investors clearly relishing the prospect of what these international markets may bring.
Only time will tell whether Airtasker has made a masterstroke, or a potential blunder.
What’s next for Airtasker Share Price?
Looking ahead, the immediate focus will clearly be on integrating Zaarly into the business. Ensuring that together, they can put their best foot forward in trying to capture the US market.
In this regard, Zaarly CEO, Bo Fishback will be crucial. Joining the team and helping the merge be as seamless as possible.
Beyond this, the real goal is revenue growth. Because despite recently raising their guidance, Airtasker will need to keep improving on their top line numbers.
Naturally, this merger should help with that, but as for how much no one knows.
If you’re a shareholder, or looking to invest, pay close attention to future quarterly updates.
And in the meantime, why not add a few more stocks to your watchlist. Like these four overlooked picks from our latest small-cap report.
They’ll help you get started on a few potential investment ideas.
Regards,
Ryan Clarkson-Ledward,
For Money Morning
PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here
