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Investing.com -- Shares of Cibus Inc (NASDAQ:CBUS) tumbled 28.2% after the company, a leader in agricultural biotechnology, announced the pricing of its public offering of 15,714,285 shares of Class A Common Stock at $1.75 per share. The offering, which includes purchases by institutional and strategic investors as well as the Chairman of Cibus’ board of directors, is expected to gross approximately $27.5 million before fees and expenses.
The steep discount of the offering price to the market price prior to the announcement has likely contributed to the stock’s sharp decline. Investors often view such discounted offerings as a sign that a company may be undervalued or in need of immediate capital, which can lead to concerns about dilution of existing shares.
Cibus stated that the proceeds from the offering will be used to fund the development of weed management productivity traits in Rice and for working capital and general corporate purposes. The offering is anticipated to close on or around June 6, 2025, subject to customary closing conditions. A.G.P./Alliance Global Partners (NYSE:GLP) is serving as the sole placement agent for the offering.
The company’s decision to raise funds through a public offering rather than other financing methods suggests a strategic move to secure the necessary capital for its ongoing projects. Cibus aims to use the net proceeds to pursue its goals in the agricultural biotechnology space, focusing on developing plant traits that can enhance crop yields and resistance to environmental stressors.
This move comes as Cibus continues to position itself at the forefront of gene editing technologies in agriculture, a field that holds significant potential for growth as global food demand increases. However, today’s market reaction underscores the delicate balance companies must strike between funding development and maintaining shareholder value.
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