UPH - Here's why UpHealth shares are down 35% on Tuesday

Shares of UpHealth Inc (NYSE: UPH) tanked 35% on Tuesday after the digital health company priced its previously announced underwritten public offering of common stock at a deep discount.

UpHealth to raise $40.25 million from the public offering

The upsized equity offering of 23 million shares that is expected to close on Thursday will raise $40.25 million at a per-share of $1.75, representing a 33% discount on where the stock closed on Monday.

The underwriters can buy up to 3.45 million additional shares of the NYSE-listed firm at the public offering price within the next 30 days.

Northland Capital Markets is serving as co-lead manager for UpHealth’s public offering in collaboration with Lake Street Capital Markets. Oppenheimer is the sole book-running manager for the offer, as per the press release.

How UpHealth intends to use proceeds from the public offering

According to UpHealth, proceeds from its public offering will fund growth activities, acquisitions, and general corporate purposes. It will also use the raised money as working capital and repayment of its current obligations.

Including the price action this morning, UPH is now exchanging hands at $1.68 a share versus an exponentially higher $10.83 a share at the start of 2021. The Florida-based company is now valued at just under $200 million.

As of August 12 ^th , UpHealth had more than 115 million shares outstanding. More than 14 million UpHealth shares have been traded so far on Tuesday – close to 40 times the stock’s average daily trading volume.

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