MOGO Inks ATM Agreement; Shares Fall 7%

Mogo on Dec. 31 announced an at-the-market [ATM] offering agreement with H.C. Wainwright & Co., Raymond James and Eight Capital as agents, thereby establishing an ATM program. Shares of the financial technology company lost 7.1% at the close on Thursday.

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ATM offerings refer to constant offerings, providing issuers with a cheap and flexible means to raise modest amounts of capital with nominal market influence and limited management participation.

Mogo’s (MOGO) ATM program is being conducted under a prospectus supplement to the company’s base shelf prospectus dated Dec. 5, 2019,

The company may sell common shares of up to $50 million through the agents during the 12-month remaining term of the base shelf prospectus.

The common shares sold under the program would be issued from treasury to the public at the prevailing market price at the time of sale, when sold through the Nasdaq Capital Market. Additionally, the net proceeds of any sales of common shares under the program would be used for operational expenditures, to maintain the company’s working capital balances and for general corporate purposes.

Mogo is not obligated to make any sales of common shares under the agreement.

In reaction to future member growth and monetization potential amidst the pandemic, H.C. Wainwright analyst Scott Buck initiated coverage on the stock with a Buy rating recently with a $4 price target (6.1% upside potential).

Buck expects the “valuation gap” to narrow on the back of future member growth and monetization. (See MOGO stock analysis on TipRanks)

From the rest of the Street, the stock scores an analyst consensus of a Strong Buy based on 3 unanimous Buys. The average analyst price target of $3.56 implies downside potential of 5.6% to current levels.