Tandem Diabetes Care Inc. (NASDAQ:TNDM)
Tandem Diabetes Care Inc. (NASDAQ:TNDM) felt the wrath of Wall Street after announcing the pricing of an underwritten offering of shares of its common stock. Shares of the company fell 36.11% to end up at multi-year lows of $2.99 a share.
Friday’s sell-off capped yet another poor run in the stock’s performance this year. Tandem Diabetes Care Inc. (NASDAQ:TNDM) is down by more than 80% for the year as it continues to trade in a strong downtrend. Concerns about the company’s financial health remains a point of concern among investors.
The medical device company and manufacturer of the only touchscreen insulin pumps plans to raise additional capital through the issuance of 4.6 million shares of common stock priced at $3.50 a share. The company is also offering Series A warrants for the purchase of 4.6 million shares and Series B warrants for the purchase of 4.6 million shares.
Tandem Diabetes expects gross proceeds of $16.2 million from the public offering. The company intends to use net proceeds from the offering for working capital among other general corporate purposes.
The pricing of the public offering comes just days after a special meeting of shareholders approved a reverse stock split of the company’s issued and outstanding shares of common stock. The approval paves way for Tandem Diabetes Care Inc. (NASDAQ:TNDM) to initiate a split ratio of not less than 1-fo-8 and not greater than 1-for-12.
Completion of the reverse stock split will result in shares of common stock remaining at 100 million shares.
“The implementation of this reverse stock split will provide us with flexibility in our capital structure to pursue financing alternatives in support of our business plan and to bring new innovations to people with diabetes,” said Kim Blickenstaff, President, and CEO of Tandem Diabetes Care.
Insulin Pump Approval
The pricing of the public offering follows FDA approval of the company’s fifth insulin pump in five years. The company is to begin commercial launch of t: slim X2 Insulin Pump, which is the first sensor-augmented insulin pump that lets users make treatment decisions without pricking their fingers.
The new insulin pump is also the only one in the market capable of conveniently displaying user’s insulin delivery activity and Dexcom G5 Mobile CGM data on a single device.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.