Arena dilutes its stock value again (ARNA)
Arena Pharmaceuticals (ARNA) was supposed to have eased all cash concerns in June after it reached a $100 million funding agreement, but that hasn’t stopped the company from raising an additional $50 million, as announced late Monday.
In a filing, Arena says it plans to offer common shares from a shelf registration it filed last year in an effort to raise $50 million. The announcement comes on the heels of an announced $100 million credit facility with Deerfield Management just several weeks ago.
The credit facility added the issue of warrants for 28 million shares, diluting what was about 80 million shares outstanding. Arena traded about 8 percent lower after hours, near $4, after existing holders realized that the value of their stock was likely to be diluted yet again.
One anecdotal market observation is that the market in recent months is seeing an increase in the number of stock offerings, especially among companies with the most at-risk balance sheets. Read the details at 247wallst.com. — Mike Tarsala
