xHistogenics Corp (NASDAQ: HSGX) is having an overwehlmingly rough start to the trading session this morning, and for good reason. The company announced the pricing of a public offering, upsetting investors and sending the stock tumbling down. Today, we’ll talk about:
- The offering;
- what we’re seeing from HSGX as a result; and
- what we’ll be watching for ahead.
HSGX Announces Offering
As mentioned above, Histogenics Corporation is haivng an incredibly rough start to the trading session this morning after announcing the pricing of a public offering. In a press release issued early this morning, the company said that it plans on offering 26,155,000 shares of common stock and warrants to purchase an additional 19,616,250 shares of common stock at a combined price of $0.65.
In the release, HSGX said that the gross proceeds to the company from the offering are expected to be $17.0 million before deducting offering costs. Warrants included in the offering will be exercisable immediately upon issuance and will have an exercise price at $0.70 per share with a term of five years. While the offering is still subject to customary closing conditions, it is expected that the transaction will close on October 10, 2018. Unfortunately, considering the pricing and size of the offering, the move is an overwhelmingly dilutive one.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of HSGX, the news proved to be overwhelmingly negative. Sure, the company is going to access millions of dollars, but it is doing so by taking value away from current shareholders. So, it comes as no surprise to see that upset investors are sending the stock tumbling down in the market this morning. Of course, our partners at Trade Ideas were the first to alert us to the declines. At the moment (10:18), HSGX is trading at $0.63 per share after a loss of $0.37 per share or 37.37% thus far today.
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on HSGX. In particular, we’re interested in following the news surrounding the coming FDA meeting as well as the continued development of the company’s portfolio of product candidates. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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