What happened
Ispire (ISPR 10.43%) stock is posting big gains this week thanks to a new capital-raising move and an upward guidance revision. The company's share price was up roughly 41% from last week's market close as of 9:35 a.m. ET this Friday, according to data from S&P Global Market Intelligence.
Ispire published a press release on June 26 announcing that it had raised approximately $7.5 million in funding from a private stock sale. The company followed the news up with another press release on June 29 announcing that it was increasing its fourth-quarter sales guidance for cannabis vaping hardware.
So what
Ispire completed the sale of more than 1.1 million shares of its common stock at a price of roughly $7.14 per share on June 26. The stock sale totaled approximately $8 million, with the placement agent for the sale receiving a roughly $500,000 purchase for facilitating the deal. Ispire intends to use the funds from the stock sale for initiatives including the development of manufacturing operations in California and Vietnam, research and development, and marketing.
The market responded positively to news of the stock sale, and investors were even more pleased by the guidance update that Ispire provided a few days later. While the company had previously expected sales from its cannabis vaping products to total between $12 million and $15 million in the fourth quarter of its current fiscal year, which ends today, it's now guiding for sales to come in between $14 million and $15 million.
Ispire intends to use the net proceeds from the private placement of approximately $7.5 million, after payment of the placement agent's compensation but before other expenses of the offering, for working capital and general corporate purposes, which may include, but not be limited to, the development of manufacturing operations in Vietnam and California, research and development activities, and marketing and promotion.
Now what
Ispire has indicated that it saw significant sequential growth acceleration for its cannabis vaping hardware in fiscal Q4. For comparison, the company recorded $24.1 million in sales in the third quarter of its current fiscal year, which ended March 31. The company posted $16.5 million in sales from tobacco vaping products and $7.6 million in cannabis vaping products in the period.
Ispire had its initial public offering on April 4, and shares are now trading at their highest pricing level in the stock's relatively short publicly traded history. News that the company's cannabis vaping products are seeing stronger-than-expected growth is certainly encouraging, but the stage may be set for Ispire stock to see volatile trading in the near term.