ReShape Lifesciences Inc (NASDAQ: RSLS) is flying early on in the trading session this morning, and for good reason. The gains ultimately come as the result of the company walking back its announcement of an offering, stating that it no longer plans on issuing shares. Of course, this means that the dilution is off of the table, at least for now, exciting investors and sending the stock screaming for the top. Today, we’ll talk about:
- The news;
- what we’re seeing from RSLS as a result; and
- what we’ll be watching for with regard to the stock ahead.
RSLS Walks Back Offering Announcement
ReShape Lifesciences is flying early on in the market today, but that wouldn’t have been expected had you seen the stock a few sessions ago. On August 7, 2018, the company announced public offering under which it would be issuing more than twelve and a half million shares of its common stock. Of course, that news hit home for RSLS investors, sending the stock tumbling down by more than 70%.
Nonetheless, we’re seeing a strong early week recovery after the company walked back the offering plans. Shortly after the massively negative reaction hit the stock, the company issued yet another release, stating that it has termated the agreement with the underwriter associated with the offering. As a result, RSLS will not be moving forward with the public offering, at least for the time being.
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 ReShape Lifesciences, the news proved to be overwhelmingly positive. After all, the dilutive offering was a major source of concern for investors as could be seen by the more than 70% declines on August 7, when the news was announced. So, the fact that the company will not be moving forward with the offering and that dilution is on hold for now is exciting investors who are sending the stock toward the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:42), RSLS is trading at $0.14 per share after a gain of $0.04 per share or 42.11% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
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 company’s continued work to get its hands on the funding it needs. While dilution is off of the table for now, the company will still be looking for ways to get its hands on the funding and dilution is likely going to be the result when they find it. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!