Elicio Therapeutics (NASDAQ:ELTX) stock is falling on Friday after the clinical-stage biotechnology company announced a proposed public offering.
Elicio Therapeutics has announced its plans for a public offering that will include shares of ELTX stock, warrants to purchase additional shares and pre-funded warrants. What the company doesn’t reveal is the size and pricing of the offering.
Elicio Therapeutics says that it intends to use the funds from the offering for “the advancement of its development pipeline.” It will also use the money for working capital and general corporate purposes.
What This Means for ELTX Stock
With this public offering will come an increase in the total number of ELTX shares outstanding. That will also result in the stakes of current investors in Elicio Therapeutics being diluted. That helps explain why shares of ELTX stock are falling on Friday.
To go along with that, investors are likely wary about the pricing of the offering. While it hasn’t been announced yet, it’s likely to be below the current price of the company’s stock. This will likely result in further drops for ELTX shares once the price is announced.
ELTX stock is down 36.2% as of Friday morning. That comes with 18,000 shares traded, as compared to a daily average of about 46,000 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.
