Novavax (NVAX) stock is getting crushed today. Many astute investors are likely already investingating the matter deeply, and this came like a punch in the throat. What we are seeing here is really weird. Late yesterday, nervous investors got a gut check. Novavax came out and  announced that it would be conducting an underwritten stock offering to raise some cash. Did Novavax need to do this?

It remains a bit unclear. The preliminary prospectus initially excluded details such as aggregate offer price or number of shares to be on sale. This was odd. Then we saw that much later in the evening, it was announced that the offering was going to be for  30,303,050 shares at a per-share price of $1.65. That would be enough to raise a gross income of $50 million. But it SEVERELY undercut the share price, crushing investors.

The timing of this could not have been worse, especially as the stock was once approaching $3.00. Shares have almost been cut in hald since that time. This decision to announce a secondary offering without the terms established was highly irregular.

Not only did the underlying price when it was announced actually devalue the company, it waited hours to do this. This does not stoke investor confidence and we believe that this reason, in addition to the price offering, are why shares are and will continue to face some pressure near-term. While the science and operations appear to have some promise, we hate this decision from management. price especially considering that it followed up with pricing and offer size just a few hours later. The announcement of this secondary offering is a throat punch, no matter the size, especially after share fell so far. We are avoiding the name here, despite liking the space the company is in.

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