Shares of Relay Therapeutics (RLAY) plummeted by over 25% in pre-market trading on Tuesday, September 11th, after the clinical-stage precision medicine company announced a $200 million public offering of its common stock.
On Monday evening, Relay revealed plans to sell 28.57 million shares at $7.00 per share, a significant discount to its previous closing price of $9.00. The offering grants underwriters a 30-day option to purchase an additional 4.29 million shares and is expected to close on or around September 12th.
The move to raise additional capital through a dilutive stock offering has sparked concerns among investors about the potential dilution of their existing stakes in the company. Share dilution typically puts downward pressure on a company's stock price in the near term, as it increases the total number of outstanding shares and reduces the ownership percentage of existing shareholders.
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