Dave & Buster’s News: PLAY Stock Plunges 15% on Private Equity Offering

Dave & Buster’s (NASDAQ:PLAY) is in the news Monday after announcing a private equity offering that has PLAY stock taking a dive.

Dave & Buster's News: PLAY Stock Plunges 15% on Private Equity Offering

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The private equity offering has Dave & Buster’s seeking to raise money by selling shares of its stock to Jefferies LLC. This has it agreeing to sell a total of $100 million worth of PLAY stock to the investor.

The agreement between Dave & Buster’s and Jefferies LLC also includes an option allowing the investor to purchase additional shares. The total value of additional shares that can be purchased is $15 million. This option is available for 30 days.

A Dave & Buster’s news release reveals that Jefferies LLC plans to resell the shares of PLAY stock that it is buying. It will be selling these shares at variable prices.

Dave & Buster’s mentions that it already has plans for the funding it’s obtaining via this private equity offering. The company says that it will mostly be using the cash to strengthen its balance sheet.

Dave & Buster’s notes that the main goal of this is to better help it weather the novel coronavirus. That means it may use the money to operate its general business, or for repaying its debts. This makes sense as many companies are struggling with lower business as the coronavirus pandemic plays havoc with the economy.

PLAY stock was down 14.9% as of Monday afternoon and is down 67.2% since the start of the year.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/05/dave-busters-news-hammers-play-stock/.

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