Shares of BeiGene (NASDAQ: BGNE) were jumping 10.6% higher as of 3:09 p.m. EDT on Tuesday. The nice gain came after Bloomberg reported that Hillhouse Capital plans to buy $1 billion worth of the Chinese biotech's shares. On July 12 BeiGene announced the pricing of a stock offering of more than 145.8 million shares valued at $2.08 billion.
Stock offerings dilute the value of existing shares. As a result, they often cause share prices to tumble. In BeiGene's case, though, there was one unusual characteristic about its offering that caused the biotech stock to rise: the sheer size of the transaction.
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