Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Compugen Ltd. Shares Got Hammered

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Compugen (NASDAQ: CGEN  ) , a biopharmaceutical company engaged in the research and development of therapeutic and diagnostic biomarkers, tumbled as much as 21% after announcing a secondary share offering after the closing bell last night.

So what: According to Compugen's fresher press release from this morning, the company anticipates pricing 6 million shares at $10.50 per share in an effort to raise $63 million in gross proceeds. The $10.50 price represents a 26% discount from yesterday's close and would at least imply on the surface that there was little interest from buyers following Compugen's most recent rally. Compugen anticipates the share offering to close on or about March 5, 2014. Overall, this will boost its outstanding share count by 14.5% and should boost its cash on hand to more than $100 million.

Now what: One of the biggest downside dangers that biotech investors face is dilution. If small to mid-sized biotechs don't partner up with a larger firm, they'll need to raise money somehow, and turning to share offerings tends to be quite common, especially following a significant run higher in a stocks' share price. For Compugen, the 26% discount to its share offering from yesterday relative to the 14.5% increase in its outstanding shares is worrisome and demonstrates little buying interest. I would use this offering as a cue to keep your distance and let Compugen's pipeline do the talking to woo you back.

Although Compugen shares have soared over the past year, they'll probably have a hard time keeping up with this top stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 01, 2014, at 12:52 AM, DoctorLewis4 wrote:

    Compugen is not for traders. It's for long term investors. No one has what they have. Moving forward, if you are willing to buy and hold, this is going to be a winner.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2859456, ~/Articles/ArticleHandler.aspx, 8/27/2015 8:38:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated Moments ago Sponsored by:
DOW 16,654.77 369.26 2.27%
S&P 500 1,987.66 47.15 2.43%
NASD 4,812.71 115.17 2.45%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/27/2015 4:00 PM
CGEN $4.88 Down -0.07 -1.41%
Compugen Ltd. (USA… CAPS Rating: *****