Looks like the stock is down in AH because the company announced their plan of $85 million public offering. This is a pretty large dilution and is very surprising given the company is already profitable and has no debts. Not a good look IMO.
Luffy
12 Likes
10% dilution is not something I want to see normally. But it really depends on why they are raising the funds. They currently only have 66 million in cash and raising 85 million would more than double their current cash holdings.
The CEO has show clear preference for equity over debt. And their comments about production capabilities implied they needed to grow it with looking at secondary companies. I think it fits the narrative of a fast growing company to need cash to continue their explosive revenue growth. But it’s something to watch.
Drew
7 Likes
It appears they signed a big customer and hope to a sign a couple more whales. They likely need to expand capacity, and want to do it now, and not wait until the earn enough cash to do it later. CRMD is one of my biggest holdings and I’m not selling.
10 Likes