Why Shares of Magenta Therapeutics Are Plunging Today
Shares of Magenta Therapeutics (NASDAQ: MGTA) are down by 16.6% as of 11:39 a.m. EDT on Thursday after the company announced the pricing of a public offering of common stock on Wednesday evening. Magenta's decision to issue new shares will dilute existing shareholders, which explains why the company's stock is sliding today.
Magenta will sell 7,500,000 shares of its common stock at a price of $8 per share in this underwritten public offering. The company is also giving underwriters a 30-day option to buy an additional 1,125,000 shares. Magenta expects to collect gross proceeds of $60 million through this common stock offering. Note that the company's shares closed at $9.67 on Wednesday, but as of this writing, Magenta's shares are worth $7.99 apiece. Magenta said it intends to use the proceeds from this public offering of common stock to advance the development of various pipeline candidates and for research and development and working capital purposes.
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Source Fool.com
