Cineverse (NASDAQ:CNVS) stock is falling on Wednesday after the company revealed the pricing of a public share offering.
This stock offering has the global streaming technology and entertainment company selling 2,666,667 shares of CNVS stock alongside warrants for another 2,666,667 shares. The company is offering these units at a price of $3 each, which is also the exercise price for the warrants.
Cineverse notes that it expects to raise $8 million in gross proceeds from the public stock offering. It intends to use these funds for working capital and other general corporate purposes. This may include the financing and acquisition of content.
What This Means For CNVS Stock
With this stock sale, investors are seeing an increase in the outstanding number of shares of CNVS stock. That helps explain the drop in price today as that dilutes current investors’ stakes in the company.
In addition to that, the offering price of $3 per share is below the prior closing price of $3.56 per share for CNVS stock. This is another reason the stock is down as the offering price devalues the stock this morning.
Finally, CNVS stock is seeing heavy trading during pre-market hours today. As of this writing, around 547,000 shares have changed hands. That’s quite the surge compared to its daily average trading volume of 142,000 shares.
CNVS stock is down 24.2% as of Wednesday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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