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Investors will note that this public stock offering comes from selling stockholders and not directly from Sonnet. That means the company won’t see any proceeds from the sale of these shares.
However, this stock sale also includes warrants for additional shares of SONN stock. When these warrants are exercised, Sonnet BioTherapeutics will see proceeds from that. The company notes that there were warrants for 1.34 million shares of SONN stock in the private placement connected to the offering announced today.
What This Means for SONN Stock
A large increase in trading could occur alongside the sale of SONN shares from these selling stockholders. That heavy selling could pull down the price of SONN stock. At the same time, the company wouldn’t benefit from the gross proceeds of the sale since it isn’t the seller of these shares.
As far as trading goes on Monday, there hasn’t been all that much activity yet. Instead, only around 80,000 shares have changed hands as of this writing. For the record, that’s a long way off from the company’s daily average trading volume of about 4 million shares.
SONN stock is down 4.9% as of Monday morning.
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On the date of publication, William White did not hold (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.