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Vection Technologies (VR1) slumps on discounted placement

By Mensholong Lepcha

08:50, 30 November 2021

A man looking through virtual reality glasses into the metaverse
A man looking through virtual reality glasses into the metaverse – Photo: Alamy

Australian software firm Vection Technologies slumped over 14% on Tuesday after the company said it raised capital by issuing new shares at a discounted price.

Vection Technologies said it raised AUD12m ($8.5m) by issuing 60 million new shares at an issue price of AUD0.20 per share.

The offer price represents a discount of over 28% to its last close of AUD0.28. On Tuesday, stock of the company closed 14.6% lower at AUD0.24.

Funds to be used for metaverse deals

Vection Technologies added that the lead manager of the placement, Evolution Capital, has been offered 32.5 million unlisted options with an exercise price of AUD0.25 and an expiry date of three years as part payment for services provided during the share placement.

Oil - Crude

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Short position overnight fee 0.0005%
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Short position overnight fee 0.0137%
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Short position overnight fee 0.0069%
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Gold

2,018.57 Price
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Long position overnight fee -0.0200%
Short position overnight fee 0.0118%
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Spread 0.50

The company said AUD10m of the funds raised will be used for mergers and acquisitions targeting the XR (extended reality) and metaverse enterprise technology sector.

Metaverse is a virtual-reality space in which users can interact with a computer-generated environment and other users.

Read more: What is Metaverse? The future of the internet

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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