HEXO - Why Is Cosmos Health (COSM) Stock Down 58% Today?
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Cosmos Health (NASDAQ:COSM) stock is falling hard on Monday after the healthcare company’s shares got a boost on Friday.
That increase in price for COSM stock came alongside a couple of pieces of news from the company. That included a name change, which saw it switching away from Cosmos Holdings in favor of Cosmos Health. It did this to better align its name with its business focus.
Adding to that, Cosmos Health also announced a reverse stock split for COSM stock. That saw the company enact a one-for-25 reverse stock split when markets opened on Friday. Following these actions, the company’s shares rocketed roughly 178% higher that day.
What’s Dragging COSM Stock Down Today?
It’s a couple of things. The first that investors will note is the company’s shares coming off that high it experienced on Friday. This makes sense as the massive rally was likely more than shares of COSM stock could maintain.
However, there’s something else worth noting. The company announced this morning a registered direct offering of 2,828,320 shares and warrants to purchase up to 2,828,320 shares of its stock. The units are priced at $11.50 with each one containing one share of COSM stock and one warrant for another share. The warrant has an exercise price of $11.50.
Investors typically don’t react well to these types of offerings. That’s due to them increasing the total outstanding shares of the stock. This dilutes current shareholders’ stake in the company, which also explains the drop in price today.
COSM stock is down 57.5% as of Monday morning.
Investors looking for more of the hottest stock market news today are in the right place!
InvestorPlace has them covered with our breakdowns of Monday’s biggest stock stories. That includes what’s happening with shares of Viking Therapeutics (NASDAQ:VKTX), Aerojet Rocketdyne (NYSE:AJRD), and Hexo (NASDAQ:HEXO) stock today. You can read up on all that news at the following links!
More Monday Stock Market News
- Why Is Viking Therapeutics (VKTX) Stock Up 67% Today?
- AJRD Stock Alert: What to Know as L3Harris Technologies Acquires Aerojet Rocketdyne
- What Is Going On With HEXO Stock Today?
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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