Why is Yield10 Bioscience (YTEN) Stock Down 46% Today?

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Yield10 Bioscience (NASDAQ:YTEN) stock is falling hard on Friday after a public share offering went into effect.

The company has filed its notice of effectiveness for this share offering but hasn’t provided an updated press release with the details of it. That means it hasn’t revealed the pricing of the stocks or the exercise price of the warrants included in the offering.

The prior prospectus filing from the company said that it would sell 4,901,960 units in this stock offering. Each of those units contains one share of YTEN stock alongside a warrant to acquire another share.

YTEN also includes an option for investors to purchase pre-funded units. These are for traders whose buying of shares in the offering would result in their stakes climbing above the $4.99% mark.

What This Means For YTEN Stock

A stock offering typically comes with a drop in the shares for a couple of reasons. The first is that it increases the outstanding number of shares available. That also dilutes current shareholders’ stakes in the company. This lowers investor morale.

The second reason a public offering can harm a stock’s value is the offering price. These offering prices are typically lower than the stock’s previous closing price. However, we can’ be sure that’s the case with this offering considering the lack of information.

YTEN stock is seeing heavy trading with some 1.6 million shares on the move. That’s already above its daily average trading volume of about 71,000 shares. It also has the stock down 46.2% as of Friday morning.

Investors will want to keep reading for updates on all of the biggest stock market stories today.

We’ve got all of the hottest stock market coverage that traders need to know about on Friday! A few examples include why shares of Eton Pharmaceuticals (NASDAQ:ETON) and WeWork (NYSE:WE) stock are up today, as well as the biggest pre-market stock movers this morning. All of this news is ready to go at the links below!

More Friday Stock Market News

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.

With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that  InvestorPlace.com’s writers disclose this fact and warn readers of the risks. 

Read More:Penny Stocks — How to Profit Without Getting Scammed

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