ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD) is having an overwhelmingly strong start to the trading session in the pre-market hours. There are a couple of reasons for the gains. First and foremost, the company announced an offering that was actually priced pretty well. On top of that, there are rumors surfacing with regard to who took part in that offering.
- What’s going on with ACAD;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
ACAD Heads Up After Announcing Offering
As mentioned above, ACADIA Pharmaceuticals is having an incredibly strong start to the trading session this morning. The gains come after the company announced the price of an offering and rumors started to surface.
The announcement came late last night. In a press release, the company said that it would be selling 16,176,471 shares at a price of $17.00 per share. That price represents absolutely no discount to the closing price on the stock yesterday.
Through the offering, the company is expected to bring in $275 million in gross proceeds. The underwriters have been granted a 30-day option to purchase up to 2,426,470 additional shares of common stock. In the release, ACAD said that it is expecting for the offering to close on or about November 30, 2018.
While the offering was announced, the big reason for the gains seems to have more to do with a rumor that is surfacing. At the moment, the rumor is that Baker Brothers bought a large stake in the offering. If the rumor is true, it’s important for two reasons. First and foremost, smart money follows big money, and if Baker Brothers made an investment, well, that’s a big money move.
The second reason this is potentially important is because Baker Brothers are known to be an activist investor. These are the types of investors that push for positive changes and strong alignment of interest between management teams and shareholders. So, if Baker Brothers did buy a large stake in ACAD, we could see a bit of action ahead.
Nonetheless, it’s important to remember that this rumor is unconfirmed. Rumors are one of the most common forms of market manipulation. So, if you’re going to make a move here, do so with caution.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of ACADIA Pharmaceuticals, the news proved to be positive. While no one likes to see an offering, the pricing of the offering was reasonable. Moreover, rumors that Baker Brothers made a large investment in the company seems to be leading to further excitement. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:20), ACAD is trading at $19.08 per share after a gain of $2.08 per share or 12.24% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on ACAD. In particular, we’re interested in following the story surrounding the potential investment made by Baker Brothers. We’re also interested in watching how the company puts the proceeds from this offering to use. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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