Hub Cyber Security (NASDAQ:HUBC), an Israeli cybersecurity company, is jumping 16% in trading today after climbing 21% yesterday. The rally was sparked by news, announced on March 14, that the firm had “successfully issued and sold 400,000 shares for $10 each.” With the shares changing hands for just under $3 today, HUBC stock remains well below the price that large investors paid for it this week.
At the beginning of March, HUBC shares became listed on the Nasdaq after the company merged with a special purpose acquisition company (SPAC).
More About the HUBC Stock Sale
Private investors bought about $4 million of Hub’s shares earlier this week. The investors purchased the shares through a framework called private investment in public equity (PIPE).
Traditionally, PIPE deals are completed before a company merges with a SPAC. However, a portion of HUB’s PIPE deal and its merger were delayed after Clover Wolf, a hedge fund, reneged on its commitment to invest $10 million in the company.
More PIPE Information
On March 14, HUB reported that it remained in talks to obtain additional funds from the PIPE investors.
On the following day, the company reported that A-Labs Advisory & Finance, an “Israeli investment bank,” still intends to invest $20 million in HUB at a price of $10 per share through a PIPE deal. The firm reported that A-Labs had so far provided HUB with about $2.2 million of funding “and expects to complete the remainder of the funding in the near future. ”
“A-Labs firmly believes in HUB’s potential to become one of the influential companies in the cyber arena over the next years and supports it future growth plans with this funding,” Doron Cohen, managing director and CEO of ALabs said in a statement.
What Investors Should Be Watching
Going forward, the owners of HUBC stock and those interested in potentially buying the shares should keep an eye on the company’s progress in obtaining the rest of its PIPE funding. And of course, they should try to gauge the company’s ability to grow its cybersecurity business going forward.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.