ReShape Lifesciences Inc (NASDAQ: RSLS) is having an overwhelmingly rough start to the trading session this morning, and for good reason. The company announced an underwritten public offering that proved to be an overwhelmingly dilutive transaction. Today, we’ll talk about:
- The offering;
- what we’re seeing from the stock;
- and what we’ll be watching for with regard to RSLS ahead.
RSLS Announces Public Offering
As mentioned above, ReShape Lifesciences is having 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 announced the price of a previously announced public offering of 12,514,412 shares of its common stock.
In the release, RSLS said that the common stock will be offered at $0.085 per share. Also, the company is expecting for the offering to close on or around August 10, 2018. Of course, the transaction is subject to the satisfaction of customary closing conditions. Also, RSLS said that gross proceeds from the offering before deducting underwriting discounts and commissions are expected to be $1.06 million.
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 RSLS, the news proved to be overwhelmingly negative. After all, the offering is an overwhelmingly dilutive transaction which reduces the value of shares already held by investors. So, it comes as no surprise that upset investors are sending the stock tumbling down. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (9:07), RSLS is trading at $0.070 per share after a loss of $0.26 per share or 78.70% 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 RSLS. In particular, we’re interested in following the story surrounding the use of the funds gained through the offering, considering that the company gave up so much to get their hands on these funds. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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