Augmedix (NASDAQ:AUGX) stock is falling on Thursday after the remote medical documentation and live support company announced details of a public share offering.
That offering has the company selling 6.25 million shares of AUGX stock at a price of $4 per share. Investors will note this is an upsized offer over the previously proposed 5.5 million shares.
Underwriters of the offering also have a 30-day option to acquire another 937,500 shares at the offering price. Evercore ISI and William Blair are joint bookrunning managers for the offering with B. Riley Securities acting as co-manager.
Augmedix is expecting gross proceeds from the offering to come in at 25 million. Here’s what it plans to do with those funds.
- It will use the money for increased investment in sales and marketing.
- The funds will also go toward its research and development costs.
- It will be used for general and administrative costs as Augmedix increases its scale.
- The company will also use it for working capital, capital expenditures and general corporate purposes.
How This Affects AUGX Stock Today
A public stock offering almost never goes well with investors. That’s due to the increase in shares diluting their current stakes in the company.
To go along with that, the offerings are often priced below market value. In this case, the $4 price tag for shares in the offering is a significant discount compared to prior closing price of $5.43 per share for AUGX stock.
AUGX stock is down 27.1% on Thursday morning as some 298,000 shares change hands. For comparison, its daily average trading volume is about 219,000 shares.
Investors will want to stick around for more of the latest market coverage today!
We have insight into all of the hottest stock market stories worth reading about on Thursday! That includes what’s moving shares of Volcon (NASDAQ:VLCN) stock, Flora Growth (NASDAQ:FLGC) stock and Bone Biologics (NASDAQ:BBLG) stock today. All of that news is ready to go at the links below!
More Stock Market News for Thursday
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.
With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
