Athersys (NASDAQ:ATHX) stock is falling on Friday after the biotechnology company announced a public stock offering.
That public offering has Athersys selling 10,937,500 shares of ATHX stock for a price of 32 cents each. To go along with this, the company is issuing 10,937,500 units of Series A warrants and 10,937,500 units of Series B warrants. The warrants each have an exercise price of 32 cents.
According to Athersys, it expects this public stock offering to raise $3.5 million in gross proceeds. The company says that it intends to use this money for general corporate purposes. This offering closes on Monday.
How This Affects ATHX Stock
With this public stock offering, Athersys is increasing its total number of outstanding shares. A side effect of that is it dilutes the stakes of current investors in the company. That’s one reason it has ATXH stock down today.
In addition to that, the shares priced at 32 cents are below their prior closing price of 39 cents. That means the public offering price is a discount to the current trading price. This is another reason the offering is weighing on ATXH stock.
Today’s news also brings with it heavy trading of ATHX shares. As of this writing, more than 365,000 shares of the stock have changed hands. That’s already above its daily average trading volume of about 237,000 shares.
ATHX stock is down 35.7% as of Friday 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.
