Why Danimer Scientific Stock Plunged 19% at the Open Today
Shares of Danimer Scientific (NYSE: DNMR), which makes biodegradable and compostable plastics, fell out of the gate on Dec. 16, losing as much as 19% of their value in the first hour of the trading day. The big news, however, came out after the close of trading on Dec. 15, when the company announced it was looking to raise some cash.
Danimer, with a roughly $850 million market cap, is a pretty small company. It came public only in late 2020 via a merger with a blank check company, so it's also relatively new to the public markets. And it is working on exciting new technology, which is costly. On top of that, it just bought another company (Novomer) to further its research and development efforts, with plans to "continue its acceleration of investments in headcount, inclusive of Novomer, to build out the operational platform and infrastructure needed to support its production capacity expansion and sales growth objectives." In other words, a lot of cash is going out the door right now for a company that bled $0.53 per share of red ink through the first nine months of 2021.
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Source Fool.com