Nektar Therapeutics (NKTR -5. 21%) saw its stock price erode on Thursday, ing the company's closing of a secondary stock issue.
Investors gave the company a thumbs-down on the news by selling out of its s, leaving it with a 3% loss at the close of trading.
Meanwhile, the benchmark S&P 500 index ticked up on the day, rising by 0. Capital raise, sentiment drop Just after market hours on Wednesday, Nektar announced that it that new flotation.
The clinical-stage bio sold slightly more than 4. 89 million s of its common stock. Within that number were 638,298 that were sold to the underwriters of the issue.
Collectively, those entities fully exercised their option to buy Nektar stock. Image source: Getty Images. The gross ceeds of the issue, which was priced at $23.
50 per, amounted to roughly $115 million.
Nektar wrote that it aims to deploy the new funds for "general corporate purposes," which might include drug development and manufacturing, and re and development activities.
As often happens with secondary flotations, particularly in the frequently cash-hungry bio space, this one is notably dilutive to existing holders.
Prior to this issue, Nektar had slightly more than 12. 4 million common s outstanding. So that nearly 5 million -count addition is going to make a difference -- and not in a positive way.
Skin in the game At least the money is being raised by a with potential. Relatively speaking, Nektar has quite a few pipeline jects in development.
Its leading one, rezpegaldesleukin, recently tested quite well for treating moderate-to-severe atopic dermatitis, a skin disorder.
That said, the new s are weighing on the company, and investors are bably worried that more equity offerings are coming, hence more dilution.
While a company's count shouldn't be the only consideration when evaluating a stock, it does matter, and this one from Nektar has sparked concern.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.