T2 Biosystems Inc (NASDAQ: TTOO) is having an incredibly rough start to the trading session this morning after the company announced an offering. The news of the offering comes just after the company announced FDA clearance for its T2Bacteria® Panel. Nonetheless, the fear of dilution is leading to declines in the value of the stock. Today, we’ll talk about:
- The offering;
- what we’re seeing from the stock as a result;
- and what we’ll be watching for ahead.
TTOO Announces Offering
As mentioned above, T2 Biosystems is having a rough start to the trading session this morning after the company announced an offering. In a press release, the company announced that it is commencing an underwritten registered public offering of 5.65 million shares of its common stock. In the release, TTOO said that it will also be granting the underwriters a 30-day option to purchase up to an additional 847,500 shares of its common stock. In the release, the company said that the offering is subject to market conditions and provided no assurance to whether or when the offering may be completed nor the actual size and terms of the offering.
While the news of the offering is driving the stock downward, this may be presenting a strong opportunity. At the end of the day, the company just announced FDA clearance, giving it the ability to commercialize its T2Bacteria Panel. While commercialization will likely drive revenue, it costs money to make money. So, it comes as no surprise that TTOO is looking to the market for the funds it will need in order to commercialize this bacterial diagnostics test.
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 causes moves. In the case of T2 Biosystems, the news proved to be concerning to investors. After all, offerings like this add more pieces to the pie, making everyone’s a bit smaller than it was, and investors never enjoy dilution. So, it’s no surprise that fearful investors are sending the stock downward today. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (9:01), TTOO is trading at $7.65 per share after a loss of $0.41 per share or 5.09% 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 TTOO. In particular, we’re interested in following the story surrounding the company’s plans to commercialize its T2Bacteria Panel. We’re also interested in following the offering that was announced today. Nonetheless, we’ll continue to keep a close eye on the news and bring it to you as it breaks!
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