PRVB - Why Provention Bio Dropped Today
Shares of Provention Bio (NASDAQ: PRVB), a clinical-stage biotech company, fell by about 7% on Wednesday, following the company's announcement that it would initiate a public offering of common stock. Provention Bio made this announcement on Tuesday afternoon. Naturally, investors aren't too happy about the prospect of the drugmaker diluting its existing shareholders.
Provention Bio intends to sell 5.5 million shares of its common stock, and the company will give underwriters a 30-day option to buy an additional 825,000 shares. Provention Bio will use the proceeds from this public offering of common stock for "general corporate purposes, including the continued funding of the clinical development, regulatory and manufacturing activities." As of this writing, the drugmaker has yet to announce the pricing of this transaction, but investors can probably expect the company to do so relatively soon.
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