AlloVir (NASDAQ:ALVR) stock is falling hard on Thursday after the company announced the pricing of a public share offering.
That offering has AlloVir selling 20 million shares of ALVR stock for $3.75 apiece. Additionally, there’s a 30-day option for underwriters to acquire another 3 million shares at that price. Per the press release, “J.P. Morgan, Morgan Stanley and BofA Securities are acting as joint book-running managers for the proposed offering.”
AlloVir notes that all of the shares in the offering are being sold directly by the company. This has the company expecting to raise $75 million from the ALVR stock sale. The company also already knows what it’s going to do with those gross proceeds.
According to its prospectus filing, AlloVir will use the money to fuel its three ongoing Phase 3 clinical trials. It will also use the funds for ongoing drug development, as well as manufacturing and regulatory submissions.
Why This Has ALVR Stock Down
Shareholders typically don’t react well to public offerings for a couple of reasons. The first reason is that offerings increase the total number of outstanding shares on the market. That also decreases investors’ current stakes in the company.
Additionally, public offerings also often devalue shares of a stock. That’s the case with this offering and it’s $3.75 per share price. For comparison, shares of ALVR were trading at $4.93 when markets closed on Wednesday.
All of this has ALVR stock seeing heavy trading on Thursday. As of this writing, more than 377,000 shares have changed hands. That’s already above the company’s daily average trading volume of about 250,000 shares.
ALVR stock is down 23.3% as of Thursday morning.
Investors looking for more of the most recent stock market news will want to stick around!
We have breakdowns of all the biggest stock market stories traders need to know about on Thursday. A few examples include why shares of Root (NASDAQ:ROOT) and ShiftPixy (NASDAQ:PIXY) stock are up today, as well as the biggest pre-market stock movers this morning. All of that news is ready to go below!
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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.
