A secondary offering was oversubscribed, but it priced at a discount. Is that good or bad? Stocks closed mostly lower on Wall Street Monday after an early rally evaporated BioCardia (BCDA) news for Monday includes an announcement concerning interim clinical trial results boosting BCDA stock higher.
Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) were trading lower on Monday, after the company said that a planned secondary stock offering had priced below Friday’s closing price.
As of 10:15 a.m. EST, NIO’s American depositary shares were down about 4% from Friday’s closing price.
NIO said on Monday morning that its planned secondary offering has priced at $39 per share. That’s a discount of 7.1% from Friday’s closing price of $41.98, suggesting that the banks underwriting the offering needed to offer clients a bit of a discount to move the shares.
That’s not generally considered bullish.
But on the other hand, NIO’s offering was “oversubscribed,” meaning that the underwriters opted to purchase additional shares above and beyond the initial planned amount.
NIO had said last Friday that it planned to offer 60 million shares, and that its underwriters — Morgan Stanley and China International Capital Corporation — had the option to purchase up to 9 million additional shares.
That was revised upward over the weekend. NIO is now selling 68 million shares (at $39), and the underwriters now have a 30-day option to purchase up to 10.2 million more.
That is generally considered bullish. So what does this all mean?
NIO said that it will use the proceeds of this offering for future-product development. The company is expected to launch two new sedans in 2021. Image source: NIO.
For auto investors who are thinking of NIO as a longer-term investment, here’s what it means: NIO is about to raise a whole bunch of money at a pretty good price.
Sure, $39 is below where the stock was trading a week ago. But it’s a lot higher than where it was trading a few months ago. The story of this offering is intact: NIO is taking advantage of the high valuation that has resulted from intense investor interest to raise additional funds to bolster its balance sheet.
That’s still good news for the company, even if the price had to be discounted a bit to make it happen. And I think the fact that NIO was still trading above $40 as I write this suggests that most investors understand that.
Author: John Rosevear
How major US stock indexes fared Monday
Stocks closed mostly lower on Wall Street Monday after an early rally evaporated
Stocks closed mostly lower on Wall Street Monday after an early rally evaporated.
The reversal left the S&P 500 index with its fourth straight decline, something that hasn’t happened since September. Losses in the financial, industrial and health care sectors outweighed gains by technology stocks and companies that rely on consumer spending.
Investors are still waiting to see whether Congress can break a logjam on delivering more aid to people, businesses and local governments affected by the coronavirus pandemic.
The S&P 500 fell 15.97 points, or 0.4%, to 3,647.49.
The Dow Jones Industrial Average dropped 184.82 points, or 0.6%, to 29,861.55.
The Nasdaq composite rose 62.17 points, or 0.5%, to 12,440.04.
The Russell 2000 index of smaller companies gained 2.16 points, or 0.1%, to 1,913.86.
For the year:
The S&P 500 is up 416.71 points, or 12.9%.
The Dow is up 1,323.11 points, or 4.6%.
The Nasdaq is up 3,467.43 points, or 38.6%.
The Russell 2000 is up 245.39 points, or 14.7%.
Author: ABC News
BioCardia News: Why BCDA Stock Is Soaring Today
BioCardia (NASDAQ:BCDA) news for Monday includes an announcement concerning interim clinical trial results boosting BCDA stock higher.
According to the BioCardia news release, the company is preparing to receive interim data from its Phase 3 CardiAMP Heart Failure Trial. This trial is testing the use of BCDA’s CardiAMP autologous cell therapy to the myocardium to treat patients with ischemic heart failure.
BioCardia notes that it is expecting data safety monitoring board (DSMB) verbal feedback by the end of tomorrow. Following this, it will get the written feedback within 24 hours. The company plans to release a summary of the interim results before the markets open on Thursday.
The BioCardia news release mentions that the Phase 3 trial has confirmation from the U.S. Food and Drug Administration (FDA) “as a pivotal trial to produce the primary data to support market registration for the CardiAMP cell therapy for this significant unmet clinical need.”
BioCardia is still enrolling patients in the Phase 3 CardiAMP Heart Failure Trial. The company is allowed up to 260 patients across a maximum of 40 centers. The results of this study will determine the safety and efficacy of using the treatment for ischemic heart failure.
BioCardia says it will be providing the next steps of its plans for CardiAMP in its press release on Thursday. If the interim results are positive, it may give BCDA stock investors an idea of what to expect from the company in the future.
BCDA stock was up 92.9% as of Monday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Article printed from InvestorPlace Media, https://investorplace.com/2020/12/biocardia-news-why-bcda-stock-is-soaring-today/.
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William White, InvestorPlace Writer