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Sonnet BioTherapeutics (NASDAQ:SONN) stock is falling on Wednesday after the biotechnology company revealed details of a public share offering.
That public stock offering has Sonnet BioTherapeutics selling 2,843,750 shares of SONN stock at a price of $1.60 each. The shares also each come with two warrants to acquire another 5,687,500 shares of the company’s stock.
Sonnet BioTherapeutics says that it expects gross proceeds from this stock offering to total $4.55 million. The company says that it will use this money to fund research and development, as well as for working capital and general corporate purposes.
What This Means for SONN Stock Investors
A public stock offering increases the total number of shares outstanding. Doing this also dilutes the stakes of current shareholders in a company. With that in mind, it makes sense that investors wouldn’t be happy about today’s news.
To go along with that, the stock offering is priced at $1.60 per share. That’s a significant discount compared to Sonnet BioTherapeutics’ closing price of $1.81 per share on Tuesday.
Investors will also note that SONN stock is seeing heavy trading today. As of this writing, more than 100,000 shares have changed hands. For comparison, its daily average trading volume is about 72,000 shares.
SONN stock is down 32.7% as of Wednesday 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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