Datasea (NASDAQ:DTSS) stock is falling on Tuesday after the smart security solutions company announced a proposed public stock offering.
Datasea is offering 5 million shares of DTSS stock at a price of 40 cents per share. That has the company expecting to raise up to $2 million from the offering. There’s also an option for underwriter EF Hutton to acquire another 750,000 shares at the public offering price.
Datasea notes that it already has plans for the funds it will raise from this public stock offering. The company says it will use the money to cover costs connected to research and development, market development, as well as for general corporate purposes.
How This Affects DTSS Stock
Shares of DTSS are falling and that makes sense as investors typically react negatively to public stock offerings. That due to its increasing the total number of shares available, which dilutes current investors’ states. The offering is also priced below the prior closing price of 65 cents.
With today’s stock offering news comes heavy trading of DTSS stock. As of this writing, more than 645,00 shares of DTSS have changed hands. That’s already above the company’s daily average trading volume of about 634,000 shares.
DTSS stock is down 39.3% as of Tuesday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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