XpresSpa Group Inc (NASDAQ: XSPA) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced that it has completed the issuance of $3 million in preferred equity. Of course, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The news;
- what we’re seeing from XSPA stock as a result; and
- what we’ll be watching for ahead.
XSPA Announces Issuance Of Equity
As mentioned above, XpressSpa is having a strong day in the market today after announcing that it has completed the issuance of equity. In a press release issued early this morning, the company said that Calm, a leading app for sleep, meditation and relaxation, completed a strategic investment in the company.
The strategic investment made by Calm into XSPA included $3 million in preferred equity, convertible at $0.62 per share. The transaction represents a significant premium to the market price of the stock, demonstrating Calm’s belief in the company’s wellness platform.
The $3 million was broken out into multiple investments. The first was announced in November, when Calm funded the first $2 million of the $3 million of preferred stock under the agreement. The remaining $1 million included in the agreement was funded on December 31, 2018. According to the terms of the agreement, the convertible preferred equity involved has a 7-year maturity.
In a statement, Ed Jankowski, CEO at XSPA, had the following to offer:
We are pleased to have forged a long-term, strategic partnership with Calm that we expect will be mutually beneficial over time. The proceeds are now being deployed to raise our brand profile in new and existing markets and will enhance our customers’ experience in a number of different ways, including elevating the assortment of retail products and upgrading facilities.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to XpresSpa, the news proved to be overwhelmingly positive. After all, the investment from Calm doesn’t just drive funding into the company, it also brings investors to the table that have experience in creating top-level app in the health and wellness industry to the table. This will likely lead to direct improvements in XpresSpa’s product. So, it’s not surprising to see that excited investors are sending the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:42), XSPA is trading at $0.22 per share after a gain of $0.043 per share or 23.89% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on XSPA. In particular, we’re interested in following the story surrounding the company’s use of the funds raised through this transaction as well as their work to continue expanding their audience and product. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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