FCL -15.69%: back online after raising $35m in new equity, the insurance software company struggle on its return to the boards. It is a frustrating raise from a few aspects, but mostly we think it was premature and very likely unnecessary. We recently bought FCL on the view that they were on track to be cashflow positive in the 2H of FY24 while we saw a pathway to that based on the cash burn rate and cash balance in 4Q23 plus adding a key new contract to the books in June which supported that view. Despite that, the company went with a raise at $2.25/sh, an 11.8% discount to close on Monday. The raise also came with an update regarding FY23 and FY24 expectations with Revenue slightly below but EBITDA slightly ahead of expectations.
MM is now neutral FCL with the position under review
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