Shares of Zomedica (ZOM 2.41%) fell 14% on Tuesday after the pet health company disclosed that it was increasing the size of its stock offering by nearly sevenfold.
On Nov. 13, Zomedica announced commercialization plans for its Truforma diagnostic platform for cats and dogs. Its stock subsequently went on to soar a stunning 2,750%.
Yesterday, Zomedica moved to cash in on the incredible rally in its stock price by selling nearly 13.2 million of its shares to investors at a price of $1.90 per share.
Later on Monday night, Zomedica said it was increasing the size of its stock offering to more than 91.3 million shares "due to demand." Zomedica said gross proceeds from the stock sale would now be roughly $173.5 million, rather than the approximately $25 million it previously expected to raise.
It's rare for a company to increase its share offering so significantly, especially at such a late hour. It's thus somewhat surprising that Zomedica's stock price didn't decline even more on Tuesday. That said, the veterinary health company will now be on far stronger financial footing, with an additional $173.5 million on its soon-to-be cash-rich balance sheet.