Arena Pharmaceuticals, Inc. (ARNA) Tanks on Share Dilution


Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) announced that it intends to offer and sell, subject to market and other conditions, shares of its common stock in an underwritten public offering. Arena expects to grant the underwriters a 30‑day option to purchase up to an additional 15% of the shares of common stock offered in the public offering. All of the shares are being offered by Arena. There can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

The public offering would dilute shareholders’ investments, and as such Arena shares are currently dropping nearly 17% to $1.23 in after-hours trading Monday. As of today’s closing, ARNA has a 1-year high of $2.16 and a 1-year low of $1.34. The stock’s 50-day moving average is $1.48 and its 200-day moving average is $1.51.

On the ratings front, ARNA has been the subject of a number of recent research reports. In a report issued on March 15, FBR analyst Rahul Jasuja reiterated a Buy rating on the stock, with a price target of $6.00, which implies an upside of 320% from current levels. On January 5, Needham’s Alan Carr reiterated a Hold rating on ARNA.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Rahul Jasuja and Alan Carr have a yearly average loss of -12.6% and a return of 10% respectively. Jasuja has a success rate of 24% and is ranked #4329 out of 4555 analysts, while Carr has a success rate of 47% and is ranked #364.

Arena Pharmaceuticals, Inc. is a biopharmaceutical company engages in the discovery, development, and commercialization of novel drugs that target G protien-coupled receptors. It offers a range of drugs for treatment in the field of cardiovascular, central nervous system, inflammatory, and metabolic diseases. 

 

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