CBAY - Why CymaBay Therapeutics Stock Is Sinking This Week
2023-09-21 16:39:43 ET
Shares of CymaBay Therapeutics (NASDAQ: CBAY) were sinking 11.3% lower this week as of the market close on Thursday, according to data provided by S&P Global Market Intelligence . The decline extended a sell-off that began last week following the biopharmaceutical company's announcement of pricing for a public offering of stock and pre-funded warrants.
CymaBay issued more than 12.5 million new shares at a price of $17.13 per share. It also sold pre-funded warrants to buy 583,771 shares at a price of $17.1299 per underlying share and with an exercise price of $0.0001 per share.
Public stock offerings are double-edged swords for companies. On the positive side, they help raise much-needed capital. In this case, CymaBay generated gross proceeds in the ballpark of $225 million. The downside, though, is that they cause a dilution in the value of existing shares.
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Why CymaBay Therapeutics Stock Is Sinking This Week