Please ensure Javascript is enabled for purposes of website accessibility

Why BioSig Technologies Is Plunging Today

By Prosper Junior Bakiny – Jun 24, 2020 at 12:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company announced a common stock offering.

What happened?

On Wednesday morning BioSig Technologies (BSGM -2.21%) announced a registered direct offering of common stock. With the medical device company set to issue new shares and dilute existing shareholders, BioSig's stock is dropping today and is down by 20.4% as of 12:41 p.m. EDT.

So what

BioSig said it had reached an agreement with several accredited and institutional investors, which will purchase 2,187,500 shares of its common stock at a price of $8 per share. The registered direct offering is expected to close on June 26; BioSig will raise approximately $17.5 million in gross proceeds from this transaction. Note that the company's stock closed at $9.71 on Tuesday. As of this writing, BioSig's shares are worth $7.72. This is the second time this year BioSig has sold new shares in an attempt to raise capital. Back in February the company raised $10 million (in gross proceeds) in a public offering during which it sold 2,500,000 shares of its common stock.

Man holding his head in panic, standing in front of a board with a downward pointing graph.

Image source: Getty Images.

Now what

While BioSig is developing a number of medical devices, the company currently has no paying customers and does not generate any revenue. During the first quarter, BioSig recorded a net loss of $12.8 million. Also, BioSig had $15.5 million in cash as of March 31. Given these factors, it isn't surprising to see the company resort to dilutive forms of financing. However, the company expects to begin selling some of its products "in the immediate future," primarily to healthcare facilities. BioSig's shares have been performing well this year and are up by a little more than 30% even after today's slide. This may represent a decent entry point for investors who see a bright future ahead for this healthcare company

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BioSig Technologies, Inc. Stock Quote
BioSig Technologies, Inc.
BSGM
$0.68 (-2.21%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.