Aug. 4 at 2:55 PM
$GUTS
Dilution is a factor in the share price decline since IPO...but doesn't explain everything.
The company has:
about 3.3× as many shares outstanding today as at the IPO,
but its market capitalization has fallen from about
$713 million to about
$111 million.
So:
Share count increased ~234%.
Market value fell ~84%.
That tells us something important.
The stock didn't collapse just because of dilution.
The market also drastically reduced the value it assigns to each share because of:
clinical uncertainty after the January setback,
financing concerns,
execution risk,
Nasdaq compliance risk,
and the time still required before commercialization.
