Cytori Therapeutics Inc (NASDAQ: CYTX)
Cytori Therapeutics stock is having a tough time in the market today. While we are seeing massive declines all the way around, today’s declines fro CYTX are far more than a market-wide bad day. The company announced pricing for it’s public offering today. So, we’ll talk about the pricing of the offering and what each unit includes, why it’s causing an already bad day to become worse, and what we can expect from the stock moving forward.
CYTX Direct Offering Pricing
CYTX announced today that the pricing of its registered direct public offering of units will close at $0.77 per unit. Each unit within the offering consists of one share of common stock and one warrant to purchase one share of common stock with a strike price at $1.02. The sale of units will take place in two separate closings. The first closing is expected to take place on or about May 8th, 2015 and should generate gross proceeds of $19.4 million.
Why This News Is Causing Wide Losses For CYTX
There’s no doubt that it’s a bad day in the market no matter where you look. However, the declines for Cytori Therapeutics are much worse than what we’re seeing from other assets. So, why is this happening? This is another case of share dilution. The reality is that when Cytori issues new shares, the piece of pie for each investors becomes smaller. This isn’t something that’s new. As a matter of fact, we’ve seen it a lot recently. Both GENE and INO have suffered the same fate relatively recently.
What We’ve Seen From Cytori Therapeutics Stock Today
As mentioned above, while today is pretty bad market wide, CYTX is taking a bigger hit than most others in the industry. Currently (1:29), the stock is trading at 0.72$ per share after a loss of 20.24%.
What We Can Expect To See Moving Forward
Share dilution is a particularly nasty problem to have in the market. While some stocks bounce back relatively quickly, that’s not what we tend to see in the world of small-cap biotech. So, in the short run, I’m expecting to see more declines. In the long run, I think we’re going to see positive news; however, much of that will depend on what we see from earnings on May 11th. Analysts are expecting to see an eight cent loss per share, up from fourteen cents one year ago. Only time will tell what happens!
What Do You Think?
Where do you think CYTX is headed and why? Let us know in the comments below!