Why Is Ensyce Biosciences (ENSC) Stock Down 27% Today?

  • Ensyce Biosciences (ENSC) stock is falling on private placement news.
  • This has it raising $8 million from note and warrant sales.
  • These dilute ENSC stock and are priced below its previous closing price.
colorful pills and vials sitting on a table representing ENSC Stock.

Source: Bukhta Yurii / Shutterstock.com

Ensyce Biosciences (NASDAQ:ENSC) stock is taking a beating on Friday after the clinical-stage biotech company announced $8 million in financing.

This financing comes from a private placement with institutional investors. These investors purchase senior secured convertible notes and warrants. The initial closing of this deal netted Ensyce Biosciences $4 million and a second similar closing will get it the remaining $4 million.

The notes issued by Ensyce Biosciences can be converted into shares of ENSC stock. They have an exercise price of $0.545 each. That’s a roughly 10% premium over the stock’s closing price when the deal was agreed on. The maturity date for these months is 18 months after closing.

The warrants sold in the agreement are exercisable for shares of ENSC stock. They allow for the purchase of 4.7 million shares with an exercise price of 70.85 cents each. That’s a 30% premium from the stock’s closing price when the deal was reached. They are exercisable five years after closing.

So why exactly is this news dragging down shares of ENSC stock today? First off, this dilutes other investors’ stake in the company with the shares available via the notes and warrants. Also, ENSC was trading at 87 cents when markets closed on Thursday. That has these notes and warrants valuing the stock below that price.

It’s also worth mentioning that heavy trading follows the ENSC stock news today. This has more than 2 million shares on the move, as compared to its daily average trading volume of about 1.5 million shares.

ENSC stock is down 27.4% as of Friday morning.

There’s more recent stock market news traders will want to know about below!

InvestorPlace has all the latest stock market news investors need to know about for Friday! Among that is what has shares of Micron Technology (NASDAQ:MU), Chinese electric vehicle (EV) stocks and Kohl’s (NYSE:KSS) stock on the move. You can find out more on these matters at the links below!

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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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