OKYO Pharma (NASDAQ:OKYO) stock headed lower on Tuesday after the company revealed details of a stock offering for its American Depositary Shares (ADSs).
OKYO Pharma has revealed plans to sell 3,503,665 ADSs of OKYO stock to certain investors. The shares being offered in this agreement are priced at $1.50 each. This has the company expects to raise $5.3 million from the offering.
To go along with this, the company is also offering 8,673,658 new subscription shares. These are priced at 23 cents each, which is the equivalent of $1.50 per ADS. That has it expecting gross proceeds of roughly $100,000 from this offering.
OKYO Pharma notes that it already has plans for the funds it will generate from this offering. The main intent is to use the money to fund its Phase 2 clinical trial of OK-101 in DED patients. The money will also be used for working capital and general corporate purposes.
What This Means for OKYO Stock
Investors in OKYO stock aren’t reacting well to today’s news, which makes sense. We often see stocks fall alongside public offering news. That’s due to the offering diluting current shareholders’ stakes. They are also often priced below market value. That holds true with this offering, as OKYO closed out trading on Monday at $2.11 per share.
OKYO stock is down 10% in pre-market trading on Tuesday.
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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.