Humacyte stock plunges on public offering pricing

Investing.com -- Shares of Humacyte, Inc. (NASDAQ:HUMA) tumbled 29% following the announcement of the pricing for its public offering of common stock. The biotechnology firm set the price at $2.00 per share, significantly lower than its previous close at $2.875. This move is expected to raise $50 million in gross proceeds, but it has evidently rattled investors, leading to a sharp decline in the company’s stock value.

The offering consists of 25 million shares, with an additional option for underwriters to purchase up to 3.75 million more shares. The expected closing date of the offering is around March 27, 2025, contingent upon meeting customary closing conditions. Humacyte has outlined that the funds raised will be directed towards the commercialization of SYMVESS™ for vascular trauma, further development of its product pipeline, and general corporate purposes including working capital.

The pricing of the offering represents a discount from the company’s recent trading price, which is a common practice in public offerings to incentivize bulk purchase by investors. However, the significant drop in share price indicates market concern over the dilution of existing shares and the potential pressure on the stock’s value.

Joint book-running managers for the offering include TD Cowen, Barclays, and BTIG, with H.C. Wainwright & Co. and The Benchmark Company serving as lead managers.

The stock was trading at $2.02 in the premarket on Wednesday, reflecting the immediate investor response to the offering announcement. The market’s reaction underscores the delicate balance companies must strike between raising capital and maintaining shareholder value. As Humacyte navigates this latest financial venture, investors will be closely monitoring the impact of the new capital on the company’s growth trajectory and the performance of its bioengineered human tissues platform.

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