Reviva Plunges 36% After Announcing $9 Million Public Offering
The dilutive offering sent shares tumbling on heavy trading volume, raising concerns about the company's financial health.
Reviva Pharmaceuticals (RVPH) shares plummeted more than 36% on Friday following the announcement of a . The news triggered a massive sell-off, with trading volume swelling to over 37 million shares, far exceeding its daily average.
The public offering, which is dilutive to existing shareholders, is intended to raise capital for the clinical-stage pharmaceutical company. While companies often use public offerings to fund research and development, the market's reaction suggests investors are concerned about the offering's terms and the company's need for cash.
This is not the first time Reviva has turned to the market for funding. The company also announced a in June. These repeated offerings can signal to investors that the company is burning through cash quickly, raising questions about its long-term financial stability.
Reviva is currently focused on developing treatments for central nervous system disorders, with its lead candidate, brilaroxazine, in late-stage trials for schizophrenia. While the company has reported some , the need for repeated funding rounds may indicate a long road to profitability.
Investors will be closely watching Reviva's next moves, including the progress of its clinical trials and its management of cash reserves. The company's ability to secure non-dilutive funding or a strategic partnership could be crucial to restoring investor confidence and rebuilding its battered share price.