Inovio Pharmaceuticals Inc (NASDAQ: INO)
Inovio Pharmaceuticals stock is down today; and in a big way. The reason is clear to see; investors are concerned about share dilution. The truth is, they have every right to be. Nonetheless, I think the downtrends are presenting a great buying opportunity. Below, we’ll chat about why share dilution is a concern, what we’re seeing in the market today, and what we can expect to see from INO moving forward.
INO Announces Pricing Of Public Offering
Inovio Pharmaceuticals will be issuing another round of common stock in a new public offering. This time, INO will be issuing 9,500,000 shares of common stock for an offering at $8.00 per share. All in all, the company is expected to raise $76,000,000; which will be used for general expenses including clinical trials, R&D, general and administrative expenses and more.
Why Is This Driving The Price Of The Stock Down
The reason this drives the price of the stock down is relatively simple to understand. It all breaks down to share dilution. Think of INO as a massive pie that every shareholder is entitled to a piece of. Now, think about 9.5 million more pieces having to be taken out of that same pie. Essentially, this will make everyone’s piece a bit smaller. That’s exactly what investors are concerned about. With more company shares being issued, each individual share is going to lose value and power.
How INO Reacted In The Market
As mentioned above, Inovio Pharmaceuticals stock isn’t having the best day in the market today. The stock dropped in a massive way in morning trading. However, the fast paced downward momentum has slowed throughout the day. Currently (12:08), INO is trading at $8.16 per share after a loss of 17.16% so far today.
What We Can Expect Moving Forward
To be honest with you, it all depends on how far forward you plan to look…
- Short Term – In the short term, INO is most likely going to continue on a downward trend. The reality is that no investor likes share dilution, and it could take some time for the stock to recover from the blow.
- Long Term – In the long run, I think the story is quite different. Inovio is a company that focuses on treating cancer and other life threatening conditions. They have already made a ton of advancements in the field and we’ve just reached the tip of the ice burg. In the long run, I think INO is gearing up for big growth.
What Do You Think?
Where do you think INO is headed and why? Let us know in the comments below!