Why Is Avid Bioservices (CDMO) Stock Down 30% Today?


  • Avid Bioservices (CDMO) stock is falling on Thursday after pricing a private placement.
  • This covers $160 million 7.00% Convertible Senior Notes due 2029.
  • The company will use this money to pay off some of its 1.250% Exchangeable Senior Notes due 2026.
CDMO Stock - Why Is Avid Bioservices (CDMO) Stock Down 30% Today?

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Avid Bioservices (NASDAQ:CDMO) stock is falling on Thursday after the contract development and manufacturing company announced the pricing of a private placement.

The private placement includes 7.00% Convertible Senior Notes due 2029 with an aggregate principal amount of $160 million. The notes mature on March 1, 2029, and accrue interest semiannually on March 1 and Sept. 1 each year.

Avid Bioservices notes that the conversion price for the notes is 101.1250 shares of CDMO stock for each $1,000 principal amount of notes. This represents a price of $9.89 per share, which is a 12.5% premium from the stock’s previous closing price.

Avid Bioservices says this private placement will give it enough funds to repurchase a portion of its 1.250% Exchangeable Senior Notes due 2026. It will also be able to repay any of its 2026 senior notes that are not repurchased after this private placement.

CDMO Stock Movement Today

Today’s private placement news has failed to impress investors. As a result, we’re seeing some sell their shares. That has more than 757,000 units changing hands as of this writing. That’s roughly half of the company’s daily average trading volume.

CDMO stock is down 29.5% as of Thursday morning.

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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.

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