ShiftPixy (NASDAQ:PIXY) stock is falling hard on Wednesday after the employment administrative services company priced a public offering for its shares.
According to a press release, ShiftPixy is selling 2,066,667 units at a price of $1.50 each in the offering. Each of these units contains one share of PIXY stock, as well as a warrant to acquire another share. The warrants included in this offering have an exercise price of $1.50 each. They are immediately exercisable and expire five years from the date of issuance.
ShiftPixy is expecting gross proceeds from the stock offering to come in at $3.1 million. The company says it intends to use these funds for general corporate purposes, which is notes includes working capital.
To go along with this offering, the company has reached an agreement with certain investors to lower the exercise price of warrants from previous offerings. That includes warrants for 1,186,742 shares of PIXY stock from its 2020 and 2022 offerings. This lowers the exercise price of these warrants to $1.50 per share.
What This Means For PIXY Stock
With this offering, ShiftPixy is increasing the total number of outstanding shares available. That dilutes current investors’ stake in the company. The offering price is also well below its prior closing price of $2.39 per share. These both explain why the stock is down today.
PIXY stock is down 31% as of Wednesday morning. That comes as some 677,000 shares change hands, closing in on its daily average of 945,000 shares.
Investors will want to keep reading for even more of the most recent stock market stories today!
We’ve got breakdowns of all the biggest stock market events happening on Wednesday! A few examples include why shares of Cadrenal Therapeutics (NASDAQ:CVKD) and Healthcare Triangle (NASDAQ:HCTI) stock are up, as well as the biggest pre-market stock movers this morning. All of that is ready to go at the following links!
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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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