Novavax (NASDAQ:NVAX) is falling today on news of a new public offering. The biotech firm has announced it will be issuing an underwritten public offering, which will consist of 6.5 million common stock shares. Priced at $10 per share, the offering is worth roughly $65 million. News of the offering has been pushing NVAX stock down since markets opened. According to a statement released by the company, “the offering is expected to close on December 20, 2022, subject to customary closing conditions.”
Does that mean NVAX stock is destined for a turnaround after a highly disappointing year? It’s not likely, but let’s take a closer look at what investors can expect.
What’s Happening With NVAX Stock?
In keeping with its usual pattern, NVAX stock has been highly volatile since news of the offering broke. As of this writing, it is down nearly 10% for the day. Given the stock’s current trajectory, it is likely to fall even more. Yesterday, news of the potential offering paired with some similar announcements sent the stock down even further, pushing it into the red by about 40% for just this week.
It’s easy to see why NVAX stock is falling today. When a company increases its number of shares available, it tends to pose a negative effect on share prices. Additionally, it often leads to negative sentiment among investors, as it can dilute their holdings. And as InvestorPlace writer Dana Blankenhorn noted, Novavax announced plans for an even larger public offering worth $125 million two days prior. Both offerings are part of a plan to generate $250 million in debt and equity.
As Blankenhorn also highlights, though, Novavax hasn’t moved beyond the coronavirus pandemic. Its Covid-19 vaccine hasn’t found the type of success that those of Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) have. But more important is the fact that while both companies have moved beyond the pandemic to other drugs, Novavax remains stuck in 2020. Regardless of how much money the company raises, NVAX stock should still be avoided.
On the date of publication, Samuel O’Brient 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.comPublishing Guidelines.