TrovaGene Inc (NASDAQ: TROV) is having an overwhelmingly strong start to the trading session this morning after the company announced the pricing of a public offering. Unfortunately for those already involved in the stock, the dilutive offering came at a massively discounted price. Of course, the news disappointed investors who have sent the stock spiraling out of control. Today, we’ll talk about:
- The offering;
- what we’re seeing from TROV as a result; and
- what we’ll be watching for ahead.
TROV Prices Offering
As mentioned above, TrovaGene is having an incredibly rough start to the trading session this morning after the company announced the pricing of an underwritten public offering. In a press release issued early this morning, the company announced that the offering of 18,000,000 shares of its common stock as well as warrants to purchase up to an additional 18,000,000 shares of common stock will be sold at an incredible discount. In fact, each share of common stock will be sold with a warrant to purchase one share of commonstock at a total combined price of $1.00.
In the release, TROV said that the warrants will have an exercise price of $1.10 and will be exercisable upon issuance. These warrants will expire 5 years from the date of issuance. While shares and warrants are being sold together in this offering, they will be issued seperately. Also, TROV said that it has granted the underwriters a 45-day option to purchase 2,700,000 shares of common stock. It is epxected that the transaction will close on June 12, 2018 and will drive net proceeds in the amount of approximately $16.2 million. The company said that it intends on using the proceeds from the offering to fund research and development activities, for working capital and for general corporate purposes.
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 TrovaGene, the news proved to be overwhelmingly negative. Not only is this offering massively dilutive, it comes at a discount of nearly 50% to the closing price on the stock yesterday. So, it’s no surprise that upset investors are sending the stock spiraling out of control this morning. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (8:35), TROV is trading at $0.80 per share after a loss of $0.97 per share or 54.80% 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 TROV. In particular, we’re interested in following the story surrounding the company’s work in the oncology space. However, it will likely take quite a while to make up for today’s massive hit. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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