Bluebird Bio (NASDAQ:BLUE) stock is slipping on Wednesday after the biotechnology company announced a proposed public offering.
The Bluebird Bio public stock offering includes 20 million shares of BLUE stock. There’s also a 30-day option for underwriters of the offering to acquire another 3 million shares. Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM) are the book running managers for the offering.
What’s still unclear about the offering is how much it will price shares of BLUE stock. However, we do know funds will go toward the development of the company’s ZYNTEGLO and SKYSONA gene therapies as well as other products in the pipeline.
Why BLUE Stock Investors Are Unhappy With the News
It’s not often that investors celebrate a public stock offering. The introduction of new outstanding shares serves to reduce current shareholders’ stakes in the company. Adding to that, offerings typically value shares below their market price. That also drags the price of shares down.
As far as trading goes this morning, some 387,000 shares have changed hands. That’s still below the daily average trading volume of about 3.5 million shares. Even so, shares of BLUE stock are down 9.3% in pre-market trading on Wednesday.
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On the date of publication, William White did not hold (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.