Why Did SMX Stock Fall 30% Today?

SMX (Security Matters) PLC (SMX) shares were down nearly 30% on Monday, after the company announced an equity purchase agreement with Target Capital 1.

Trading in the shares on the Nasdaq was briefly halted early Monday. Notably, SMX was among the top trending tickers on Stocktwits.

Deal with Target Capital 1

SMX announced a $111.5 million equity purchase agreement with Target Capital 1, which it said will provide the company with an efficient and flexible source of funding and enable it to pursue its business development opportunities. 

The company will also use part of the net proceeds to acquire bitcoin or another cryptocurrency, which will serve as a reserve asset for SMX.

Under the terms of the deal, Target Capital will purchase a convertible promissory note with a principal amount of $11.5 million, carrying a 20% original issue discount for a face value of around $14.4 million. The agreement also provides SMX with the option to sell up to $100 million of its ordinary shares through an equity line of credit. 

SMX is not required to draw on the equity line, and the agreement places no limits on its operations. The transaction is expected to close around December 2.

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