<article>In a surprising U-turn, Singapore-based Reebonz Holding Limited, an online marketplace for luxury goods, has announced a cash call exercise in the form of a $20-million ordinary share offering just two weeks after its one-for-eight reverse stock split move.</article>

In a surprising U-turn, Singapore-based Reebonz Holding Limited, an online marketplace for luxury goods, has announced a cash call exercise in the form of a $20-million ordinary share offering just two weeks after its one-for-eight reverse stock split move.
Both these initiatives come ahead of a Nasdaq Exchange listing compliance deadline on March 29. There were no updates on the company&#8217;s listing status at the time of filing this article.
The new offering might result in additional share price dilution as witnessed by the drastic decline of the stock price by 48.89 per cent from Wednesday’s close to end the market trading session on Thursday (March 28, 2019) at $14.31. During after-hours market trading, the stock fell by 9.08 per cent to end at $13.01.
The reverse stock split exercise saw the share price treble to a new 52-week high of $38.90 on March 27, 2019. However, the instant reaction brought on by the new share offering has resulted in another roller-coaster ride on the downside in RBZ’s stock price on March 28. The share price decline throughout Thursday’s market trading session can be seen in the following intraday stock price chart.
<a href="https://media.dealstreetasia.com/uploads/2019/03/Reebonz-intraday-share-price-movements-March-29-2019.jpg"><img loading="lazy" decoding="async" class="wp-image-127894 size-full" src="https://media.dealstreetasia.com/uploads/2019/03/Reebonz-intraday-share-price-movements-March-29-2019.jpg?resize=640,275" alt="" srcset="https://media.dealstreetasia.com/uploads/2019/03/Reebonz-intraday-share-price-movements-March-29-2019.jpg?w=1597 1597w, https://media.dealstreetasia.com/uploads/2019/03/Reebonz-intraday-share-price-movements-March-29-2019.jpg?resize=300,129 300w, https://media.dealstreetasia.com/uploads/2019/03/Reebonz-intraday-share-price-movements-March-29-2019.jpg?resize=768,330 768w, https://media.dealstreetasia.com/uploads/2019/03/Reebonz-intraday-share-price-movements-March-29-2019.jpg?resize=1024,441 1024w" sizes="(max-width: 1597px) 100vw, 1597px" data-recalc-dims="1" /></a>
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A DEALSTREETASIA query seeking more information was unanswered at the time of publishing this article.
It is understood that the reverse stock split exercise was structured to comply with the Nasdaq Listing requirements. However, the extreme bouts of share price volatility witnessed over the past quarter since the December 2018 debut raises questions as to the management’s ability to stabilise the share price.
In an earlier communication (March 6) with DEALSTREETASIA on stock price volatility, a company spokesperson said, &#8220;It is our company policy to not comment on the share price or trading activity in the market. Generally speaking, we are not focused on the share price on a day-to-day basis. We believe that if we continue to focus on executing our strategy, (investors will see the value in our business, and) the share price will take care of itself over time.&#8221;
What is next for Reebonz?
In its March 28 SEC filing, the company disclosed that it intends to use the proceeds of the offering to meet working capital needs and for general corporate purposes. The language used in the latest filing regarding the use of the proceeds is unchanged from the March 15 SEC filing regarding the one-for-eight reverse stock-split exercise.
It is not certain what is ahead for Reebonz following the latest $20-million ordinary share price offering as the final pricing details, and timing of the offering have not yet been announced. However, the company disclosed that it has granted the underwriters Roth Capital Partners and Maxim Group LLC an additional $3 million of shares at the public offering price less underwriting expenses at any time during the 30-day period from the date of the prospectus (March 28, 2019).
Questions remain on whether the additional share price dilution, following the latest cash call, would lead to extreme stock price movements. It is also not clear if the shareholding pattern in the company would change following these exercises.
As of March 29, 2019, based on the latest SEC registration filing, the company&#8217;s top five institutional shareholders (holding 5 per cent or more) include Vertex Funds (19.8 per cent), Granite Global Ventures Funds (14 per cent), Intel Capital Corporation (9.4 per cent), and MediaCorp Pte Ltd (7 per cent).

Reebonz Holding Limited has announced a $20-million ordinary share offering just two weeks after its one-for-eight reverse stock split move.

Singapore's Reebonz announces $20m share offering, stock crashes

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Singapore's Reebonz announces $20m share offering, stock crashes

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