Why Gossamer Bio Stock Is Tumbling Today

Shares of Gossamer Bio (NASDAQ: GOSS) were tumbling 16.4% lower as of 11:55 a.m. EDT on Tuesday. The decline came after the company announced the pricing of a secondary stock offering of more than 9.4 million shares and $200 million in convertible senior notes due in 2027. Gossamer plans to offer the additional stock at a price of $13.25 per share.

Secondary stock offerings are common occurrences for small biotechs like Gossamer. But they come with a major downside for the biotech stocks: the dilution in the value of existing shares.

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Source Fool.com