Biocept (BIOC) Stock Tumbles On Offering

Biocept BIOC Stock News

Like many stocks in the biotech and diagnostics space, Biocept Inc (NASDAQ: BIOC) had a tremendous run in the market on Friday as investors speculated that coronavirus-related revenue was on the way. However, this morning, the tables have turned.

The company announced that it is raising funds through a dilutive transaction. Of course, this upset investors and the stock is showing it. At the moment, BIOC is down more than 30% as investors react to the fund raise. Here’s what’s happening.

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BIOC Stock Tumbles On Offering

In the press release, Biocept said that it plans on issuing a total of 23 million new shares. These shares are expected to be sold at $0.40 per share, bringing the total value of the transaction to about $9.2 million.

In the release, the company said that the sale of shares will take place via registered direct offering priced at-the-market under NASDAQ rules. It is expected that the transaction will come to a close on March 4, 2020.

BIOC Could Have Turned This Negative Into A Positive

While Biocept is tumbling in the market this morning, the truth of the matter is that it doesn’t have to be. Sure, dilutive transactions usually lead to declines. In fact, the company could have followed along the same lines as Co-Diagnostics (NASDAQ: CODX), which saw more than 30% gains last week after raising funds.

The problem for BIOC is that the company didn’t provide any information about what it plans on using the funding for. While some of the funding is obviously going to go to general working capital, I’d be willing to bet that some of the proceeds for the offering will be used for some kind of coronavirus diagnostics testing.

In fact, that’s what made CODX stock fly after announcing an offering. The company simply said that it plans on using the funds to advance diagnostic testing in the COVID-19 space.

Nonetheless, this may become an opportunity. After all, the stock is heavily discounted today due the the fact that the company will be raising funds. Considering the landscape, I’d be surprised if the company didn’t make an announcement surrounding COVID-19 diagnostics soon. As such, buying on the lows may create a discounted opportunity to take advantage of future coronavirus-related gains in BIOC.

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