Why ViewRay Stock Dropped Today
ViewRay Inc (NASDAQ: VRAY), a healthcare company that develops radiation therapy machines, announced the pricing of a public offering of common stock on Thursday. The company had announced its intentions to conduct a public offering on Monday. Investors often respond to a company resorting to dilutive forms of financing by selling-off its shares, and that is exactly what happened to ViewRay today. ViewRay's stock declined by as much as 20.3% on Thursday and closed today's trading session down 15.9%.
ViewRay announced that it would sell 10,310,000 shares of its common stock for $4.85 per share. Note that the company's stock closed Wednesday's trading session priced at $7.25. Now, shares of the medical technology specialist are worth just $6.09 apiece. ViewRay expects to collect gross proceeds of about $50 million thanks to this public offering of common stock.
The company is also granting underwriters a 30-day option to buy an additional 1,546,500 shares of common stock, still at the price of $4.85 per share. ViewRay said it expected this transaction to close today. The company will use the proceeds from this round of financing as working capital and for several purposes, including research and development efforts.
Source Fool.com
