Please ensure Javascript is enabled for purposes of website accessibility

Why Zomedica Stock Dropped Today

By Joe Tenebruso - Feb 9, 2021 at 9:36PM

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 veterinary health specialist is selling more shares than investors expected.

What happened

Shares of Zomedica (ZOM 1.00%) fell 14% on Tuesday after the pet health company disclosed that it was increasing the size of its stock offering by nearly sevenfold.

So what 

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. 

A downwardly sloping stock chart.

Zomedica surrendered some of its recent gains on Tuesday. Image source: Getty Images.

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. 

Now what

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.

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

Zomedica Pharmaceuticals Corp. Stock Quote
Zomedica Pharmaceuticals Corp.
$0.22 (1.00%) $0.00

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

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.