Catalyst Pharmaceuticals Inc (CPRX)

Catalyst Pharmaceuticals Inc (CPRX) stock dropped by 14.85% due to the company's announcement of a public offering. Catalyst Pharmaceuticals disclosed the pricing of an underwritten public offering of 10,000,000 shares of its common stock at a price of $15.00 per share, amounting to total gross proceeds of $150,000,000 before accounting for underwriting discounts and expenses.

• Offering Details: The underwriters of the offering have been granted a 30-day option to acquire an additional 1,500,000 shares of CPRX's common stock at the same public offering price, with deductions for underwriting discounts. The anticipated closing date for the offering is on or about January 9, 2024, subject to customary closing conditions. It's noteworthy that all the shares in the offering are being sold by Catalyst. BofA Securities, Citigroup, Piper Sandler & Co., Cantor, and Truist Securities are acting as bookrunners for the offering, while H.C. Wainwright & Co. and Oppenheimer & Co. are serving as co-lead managers. Catalyst intends to utilize the net proceeds from the offering for potential acquisitions of new product candidates and general corporate purposes.
• Potential Impact on Stock Price: Investors often react negatively to such offerings as they anticipate the increase in the number of outstanding shares, which can lead to a reduction in earnings per share (EPS) and, consequently, a lower stock price. Additionally, the use of proceeds for potential acquisitions introduces uncertainty, further affecting investor sentiment. The stock's performance in the coming days will likely depend on how investors perceive the company's ability to execute on its intended use of funds and its overall strategic outlook.

CPRX falling related to its Q1 2023 earnings report. It came out with quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.30 per share. This compares to earnings of $0.12 per share a year ago. This report represents an earnings surprise of -13.33%. A quarter ago, it was expected that CPRX would post earnings of $0.21 per share when it actually produced earnings of $0.22, delivering a surprise of 4.76%.

https://finance.yahoo.com/news/catalyst-pharmaceutical-cprx-misses-q1-215509585.html