Ibio (NYSEMKT:IBIO) stock is falling hard on Tuesday after the biotechnology company announced the pricing of a public share offering.
That offering has the company selling 2.25 million shares of IBIO stock for $2 each. With each share in this offering comes a Series C and Series D warrant to purchase additional shares of the stock. Each of these warrants has an exercise price of $2.
Investors will note that iBio expects to raise $4.5 million in gross proceeds from this public offering. The company will use these funds for working capital and general corporate purposes. It may also use the money to invest in or acquire other businesses and technologies.
What This Means for IBIO Stock
A public offering increases the total number of outstanding shares for a stock. That isn’t often received well by investors due to its diluting their stakes in the company.
On that same note, the public offering price of $2 per share is below the prior closing price of $2.70 per share for IBIO stock. That’s a significant discount that helps explain why the company’s shares are falling today.
IBIO stock is down 41.1% as of Tuesday morning with some 800,000 shares traded. For comparison, its daily average trading volume is around 34,000 shares.
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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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