Why AcelRx Pharmaceuticals Stock Is Sinking Today
Shares of AcelRx Pharmaceuticals (NASDAQ: ACRX) were trading down by 16% as of 11:40 a.m. EST on Wednesday after the company announced the pricing of a public stock offering. AcelRx plans to sell 14.5 million new shares in a transaction expected to generate gross proceeds of around $27.5 million.
Secondary stock offerings cause stocks to fall for one simple reason: They dilute the value of existing shares. In addition, in AcelRx's case, the biotech company intends to sell its new shares at a 19% discount to its closing price on Tuesday. It's not surprising, therefore, that its share price has fallen to close to that level.
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Source Fool.com
