The S&P/ASX 200 Index (ASX: XJO) is demonstrating a robust performance on Friday, appreciating by 0.9% to 7,930.6 points. Despite this overall market strength, several ASX growth stocks are struggling to match the broader market's positive trajectory. Here is an overview of why these particular shares are encountering difficulties:
Bellevue Gold Ltd (ASX: BGL)
Bellevue Gold's share price has experienced a notable decline of 22%, bringing it down to $1.43. This drop follows the company's announcement of a substantial capital raising initiative. Bellevue Gold has secured commitments for a $150 million fully underwritten institutional placement priced at $1.55 per new share. This price represents a 15.3% discount compared to the previous closing price of the shares. The funds raised will be directed towards repaying existing debt, which will free up cash flow for the company's growth initiatives and support accelerated exploration efforts. Furthermore, the company’s updated five-year growth plan unveiled significantly higher anticipated costs for FY 2025, which has further pressured the share price.
Chrysos Corporation Ltd (ASX: C79)
Chrysos Corporation's share price has decreased by 1.5%, currently trading at $4.91. This decline follows the release of the company's quarterly update, which showed a 58% increase in revenue for the fourth quarter, reaching $13.5 million. For the full FY 2024, Chrysos reported a 69% increase in revenue to $45.4 million. While these figures demonstrate strong growth, the company’s forward-looking guidance for FY 2025 has fallen short of market expectations. The underwhelming guidance, coupled with a downgrade in ratings and a reduction in the price target, has contributed to the downward pressure on the share price.
Meteoric Resources NL (ASX: MEI)
Meteoric Resources has seen its share price fall by 10.5%, now standing at 10.75 cents. This decline is largely attributed to an institutional placement the company has undertaken. Meteoric Resources has successfully raised $27.5 million through this placement, priced at an 8.3% discount of $0.11 per new share. The proceeds from this capital raise are earmarked for advancing the Caldeira Project, which holds the potential to become one of the world’s lowest-cost sources of rare earths outside of China. Despite the strategic significance of this project, the placement has contributed to the recent fall in the company's share price.
Newmont Corporation (ASX: NEM)
Newmont's share price is down by 2.5%, now trading at $70.59. This decline follows a significant drop in gold prices, which occurred after a period of strong gains. The retreat in gold prices has led to a broader decline in the gold sector, impacting not just Newmont but other gold-related shares as well. At the time of writing, the S&P/ASX All Ordinaries Gold Index has also fallen by 2.5%, reflecting the sector-wide impact of the decrease in gold prices.
While the broader ASX market exhibits positive performance, these specific shares are facing challenges that are leading to their underperformance. Factors such as new capital raises, disappointing financial guidance, and fluctuations in commodity prices are contributing to their difficulties. Investors should consider these factors when evaluating the performance and future outlook of these ASX shares.