Shares in beleaguered tech company WANdisco have fallen sharply after being reinstated on the London Stock Exchange.
Trading in the Sheffield and California-based data specialist's shares resumed after months of suspension, and plummeted from its March closing price of 1,310p to 49.08p today. It follows a tumultuous period for WANdisco in which a potential fraud came to light, exposing a £12m hole in the company's accounts.
As part of a turnaround strategy now being led by investor and interim chief executive Stephen Kelly, the firm launched a £23.7m ($30m) fundraise to shore up its finances using the issue of more than 47.5 million new ordinary shares at 50p - a substantial discount to the closing price when shares were suspended in March.
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As part of the fundraise, Mr Kelly subscribed to a further 850,000 shares worth £425,000, alongside pledges from chairman Ken Lever and other directors.
Earlier this year WANdisco said it was cutting around a third of its 177-strong global workforce after the discovery of significant “irregularities” surrounding one senior salesperson and their received purchase orders, related revenue and bookings. In announcing preliminary unaudited results for 2022, Mr Kelly - the former boss of technology giant Sage - said the period had been a “wasted year” and he shared shareholders’ frustrations.
Since then the company has published 2022 accounts showing operating losses widened from $38.9m to £41m. In those accounts, Mr Kelly described the market opportunity for WANdisco as "huge" thanks to the explosion in data caused by digitalisation of industry.
He said: "My priorities are to target run-rate cash flow breakeven sometime during the latter half of FY24 followed by EBITDA breakeven and ultimately to move towards profitability. We can achieve this by driving sales growth and by ensuring better cost management. Raising the $30m in the business alongside cash flow breakeven will ensure that WANdisco will break the habit of incurring cash flow losses and then returning to shareholders for additional funding and dilution.
"My most immediate priority during the balance of 2023 is to build a pipeline that can support sales and revenue growth as we move through 2024. We are in the early stages of rebuilding the go-to-market (GTM) functions with a number of workstreams identified. We will update investors on progress as we go."