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What: Cell Therapeutics
So what: After shares jumped yesterday, shares have been crushed today after Cell Therapeutics announced that it has sold $21 million of preferred stock and warrants to institutional investors. This gives the company additional cash for operations but also dilutes current shareholders.
Now what: The preferred shares are convertible to common shares at $0.37 per share, so this should give investors some idea of the value big investors see in the shares. Investors also received warrants at $0.45 per share for up to 22.7 million shares. The price of this offering was much better than yesterday’s closing price of $0.44 per share and would make me rethink a long position in this speculative stock.
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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.
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