Creatd Inc (OTCMKTS:CRTD) Stock Tanks After Direct Offering

It was a pretty tough day in the markets for investors in Creatd Inc (OTCMKTS:CRTD) as the stock suffered from a significant selloff and ended the day with a decline of as much as 41%. The company came into focus on Monday after it announced that it had managed to raise as much as $800,000 by way of a registered direct offering of the company’s shelf.

Trading Data     

On Monday, CRTD stock fell 41.54% to $0.0950 with more than 571.17K shares, compared to volume of 607.43K shares. The stock moved within a range of $0.0900 – 0.1700 after opening trade at $0.1510.

Creatd Raises $800,000 in a Registered Direct Offering off the Company’s Shelf

All this is part of the company’s restructuring plan in which the main objective of Creatd is to cut down on operating expenses and at the same time raise the necessary capital for scaling the business to new heights. Such a strategy is also expected to help in boosting value for shareholders.

As per the terms of the offering, the bulk of the convertible debt of Creatd has been given an extension to March 31, 2023 for maturity. In addition to that, the exercise price and the conversion price of the warrants had also been reset.

While there is no doubt that these are significant moves for the company with the long term health of the business in mind, it did not lead to any optimism from shareholders. It remains to be seen if the stock can make recovery quickly.

Key Quote

Commented Creatd’s Chairman and CEO Jeremy Frommer, “Today’s announcement, as well as other prospective financing opportunities under review, are part of a concerted effort to secure the capital structure of the firm and continue to grow revenues as well as develop our proprietary technology. At the same time, we have implemented a robust austerity program over the last several weeks which includes a 40% decrease in headcount, as well as a considerable reduction of salaries for current employees on a go-forward basis. In addition, we have eliminated some of our operating expenses by implementing cost-cutting efforts driven by technology and have negotiated favorable terms with our vendors to weather periods of financing volatility.”

Technical Data

CRTD stock is trading below the 20-Day and 50-Day Moving averages of $0.36 and $0.65 respectively. Moreover, the stock is trading below the 200-Day moving average of $1.31. The company has a total market capitalization of $285K.