Health and Healthcare
Cyclacel Pharmaceuticals Investors Should Be Furious After This Move
Published:
Cyclacel Pharmaceuticals Inc. (NASDAQ: CYCC) shares were crushed on Tuesday after the company announced the pricing of a secondary offering. Investors are obviously not happy with the dilution but other recent moves make it tough to have a positive take on this company.
The company recently completed a reverse stock split—something else no investor wants to see. Cyclacel effected a 1-for-20 reverse stock split of its outstanding common stock on April 15. The board of directors unanimously approved the move.
Now that the reverse split is complete, Cyclacel is further diluting investors with a secondary offering.
The company announced early on Tuesday that it is pricing a public offering with expected total gross proceeds of approximately $20 million. Keep in mind that this company only has a market cap of just under $4 million (including Tuesday’s move).
As per the secondary offering, Cyclacel is offering 4 million shares of common stock and warrants to purchase up to 4 million shares of common stock. According to the release:
Each share of common stock and, as applicable, each pre-funded warrant, is being sold together with a common warrant to purchase one share of common stock at a combined effective price to the public of $5.00 per share and accompanying common warrant, and/or $4.999 per pre-funded warrant and accompanying common warrant.
The common warrants will be immediately exercisable at a price of $5.00 per share of common stock and will expire five years from the date of issuance. The shares of common stock and/or the pre-funded warrants, and the accompanying common warrants, can only be purchased together in the offering but will be issued separately and will be immediately separable upon issuance.
Cyclacel stock traded down about 51% to $4.20 on Tuesday, in a 52-week range of $4.12 to $20.40. The consensus price target is $130.00.
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.