SAN RAMON, Calif. - Finet.com has closed a $7.4 million private placement of common stock to a group of its current shareholders, including Banco Espirito Santa de Investmento, a Portugal investment bank.
The transaction, which closed Friday, involves 18.5 million shares of common stock at a purchase price of 40 cents per share.
The placement comes after a tough 12 months for Finet, which now provides business-to-business technology for financial services companies.
The company changed business models after losing $35 million last year on direct-to-consumer lending. Its stock price has languished below $1 since July 19 and stands in danger of being removed from the Nasdaq stock exchange. Since April 14 the stock has closed above $1 on only six days.
Nonetheless, Finet officials remain optimistic about its future.
Rick Cossano, president and chief executive officer, said the stock placement "reinforces the commitment of our existing strategic investing partners, and demonstrates their continued confidence in management and our ability to execute our aggressive business plan."
Finet will use the capital to secure additional warehouse lines of credit and meet increased funding demands, Mr. Cossano said.