Ampio Pharmaceuticals Inc (NYSEAMERICAN: AMPE) is having an incredibly rough start to the trading session this morning, and for good reason. The company announced the pricing of a public offering that brings serious dilution with it. Of course, the news upset investors, sending the stock tumbling down. Today, we’ll talk about:
- The offering;
- what we’re seeing from AMPE as a result; and
- what we’ll be watching for ahead.
AMPE Falls Hard On Offering News
As mentioned above, Ampio Pharmaceuticals is having an incredibly rough start to the trading session this morning after announcing the pricing of an offering. In a press release issued early this morning, the copany announced the pricing of an underwritten public offering of 20 million shares of its common stock and warrants to purchase up to 20 million shares of common stock. The units will be sold at a combined purchase price of $0.40 per share
The company expects that gross proceeds from the transaction will amount to $8 million before deducting underwriting discounts and commissions as well as estimated offering expenses. The warrants included in this deal are exercisable six months after issuance at a price of $0.40 per common share and have a term of five years. In the release, AMPE said that it intends to use the proceeds from the offering for working capital and general corporate purposes.
What We’re Seeing From The Stock
One of the first lessons that we learn when we dive into the market is that the news leads to moves. In the case of AMPE, the news proved to be overwhelmingly negative. After all, this transaction represents a serious amount of dilutio, which will generally upset investors. That’s exactly what we’re seeing today. As a result of the news upset investors are sending the stock tumbling down. As is normally the case, our partners at Trade Ideas were the first to alert us to the declines. At the moment (8:55), AMPE is trading at $0.36 per share after a loss of $0.25 per share or 40.87% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AMPE. In particular, we’re interested in following the company’s use of the funds from this transaction considering the fact that they were willing to dilute shares horribly to make it happen. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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