Emcore (NASDAQ:EMKR) stock is falling hard on Thursday after the inertial navigation products company priced a public share offering.
The company is selling 19,652,174 shares of EMKR stock in an underwritten public offering. It’s also selling pre-funded warrants for up to 11.9 million shares to certain investors during the offering.
The stocks included in this public offering are being sold for 50 cents each. The pre-funded warrants are priced at $0.49999999 with an exercise price of $0.00000001 per share.
Also, underwriters have a 30-day option to acquire another 2,947,826 shares at the offering price. Craig-Hallum Capital Group is serving as the only managing underwriter for the public offering.
Emcore is expecting gross proceeds from the public offering to be $15.8 million. The company doesn’t outline what it will do with these funds after the offering closes on Monday.
What This Means for EMKR Stock
There are a couple of reasons that EMKR stock is falling on the public offering news. First off, this offering increases the total number of EMKR shares available. That means it also dilutes the current stakes of investors in the company.
To go along with that, investors are likely unhappy with the 50-cent per share offering price. That’s a significant discount compared to the closing price of 76 cents per share for EMKR stock on Wednesday.
With this stock offering comes some 383,000 shares of EMKR stock changing hands on Thursday morning. That’s already above its daily average trading volume of about 342,000 shares. With that comes a 32.8% drop in EMKR stock’s price this morning.
Investors looking for more of the most recent stock market news will want to keep reading!
InvestorPlace offers up all of the biggest stock news traders need to know about on Thursday! That includes why shares of Kulr Tech (NYSEMKT:KULR) stock, Ascent Solar Technologies (NASDAQ:ASTI) stock, and Tivic Health Systems (NASDAQ:TIVC) stock are moving today. All of that news is ready to go 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.