What happened?

ViewRay Inc (NASDAQ:VRAY), a healthcare company that develops radiation therapy machines, announced the pricing of a public offering of common stock on Thursday. The company had announced its intentions to conduct a public offering on Monday. Investors often respond to a company resorting to dilutive forms of financing by selling-off its shares, and that is exactly what happened to ViewRay today. ViewRay's stock declined by as much as 20.3% on Thursday and closed today's trading session down 15.9%.

So what

ViewRay announced that it would sell 10,310,000 shares of its common stock for $4.85 per share. Note that the company's stock closed Wednesday's trading session priced at $7.25. Now, shares of the medical technology specialist are worth just $6.09 apiece. ViewRay expects to collect gross proceeds of about $50 million thanks to this public offering of common stock.

The company is also granting underwriters a 30-day option to buy an additional 1,546,500 shares of common stock, still at the price of $4.85 per share. ViewRay said it expected this transaction to close today. The company will use the proceeds from this round of financing as working capital and for several purposes, including research and development efforts.

Man standing on a downward-bound graph.

Image source: Getty Images.

Now what 

Like many other medical devices specialists -- and companies in other industries for that matter -- ViewRay's business has been harmed by the pandemic. For its full fiscal year 2020, the company expects its revenue to come in at roughly $57 million, compared to the $88 million in revenue recorded during the fiscal year 2019. The pandemic is far from over, too, and although ViewRay is making progress on several fronts, including with its pipeline, it may be wise for investors to stay away from this healthcare stock for now.

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