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BG Medicine (BGMD) Stock Plunges as Market Corrects for Pricing of Public Offering

By  +Follow April 3, 2014 10:47AM
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Shares in small-cap health care company BG Medicine (BGMD) plunged Thursday after the company priced the 6.45 million shares it plans to sell in a public offering.

The announcement, which came prior to the opening bell, led to the stock gapping down over 14 percent to $1.65 once markets opened. Shares continued to decline during morning trading, eventually settling at about $1.60 apiece.

It’s hard to view the big decline as a vote of no-confidence in BG Medicine from the markets. Shares are still trading hands at a value above the newly priced stock offering. What’s more, the public offering represents a significant increase in the size of BG Medicine’s float. Currently sitting at just under 28 million, the float would increase 23.1 percent to 34.372 million shares, and that’s not factoring in the 967,800 additional shares being held back for over-allotments.

This injection of liquidity becomes all the more important when one considers the high rate of insider ownership, which may have already resulted in pent-up demand driving big price swings. Insider ownership exceeds 40 percent of the float and has increased by more than 25 percent over the last half-year. As a result, one can roughly calculate that the free float for BG Medicine is set to increase by anywhere from 38.9 percent to 44.8 percent, resulting in a major injection of liquidity into the stock.

With this sort of boost in the total number of shares, combined with the pricing at $1.55 for the new shares, the day’s losses would appear to represent markets simply resetting their valuation for the new shares rather than showing any real concern about BG Medicine’s future.

BG Medicine has shown growing revenues, year-over-year, since 2010, and recently got a new vote of confidence in its BGM Galectin-3® Test from the Centers for Medicare and Medicaid Services (CMS) raised the national limitation amount (NLA) for the test, which has demonstrated the potential to substantially reduce the readmission rate of patients suffering from heart failure in studies.

BG Medicine already made big gains this year on a strong earnings report, and its potential for future earnings appears to be relatively strong. The sale of $10 million in new stock is expected to net $8.9 million for BG Medicine, potentially more if the over-allotments are all ultimately distributed, which the company plans to spend on commercializing its cardiac diagnostics tests, building the clinical case for its tests, and developing its product pipeline.

The public offering is expected to close by April 8, with underwriter Lazard Capital Markets LLC offering the over-allotment shares for an additional 30 days afterwards.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for BGMD
JasonLamothe
29 Jan 15 21:51:34
RT @bangersnpip: Chart Updates 30 Jan: $BGMD $CDXS $CGA $HNSN $IMMU $MITK $SCIO $UQM #stocks #charts #trading http://t.co/j6HDDI6KvQ
The Horn
29 Jan 15 21:12:22
Attention Penny Flippers. $BTCS $VPOR $FOFU $WEST $ECIG $GTXO $NIHDQ $ETEK $FARE $BGMD $BLUU
OhNo5000Bees!
29 Jan 15 20:47:24
Fri watch: Momo: $GENE, $HNSN, $BGMD, $CPRX, $MTL Chart: $MTSN, $IMMU, $IG, $OTIV, $NEON, $ABEV, $PLG
Stock Forums
29 Jan 15 20:41:28
Stocks Trending Now: http://t.co/gLXIsto4sN $SEPI $AXLFF $FMDAY $JCOM $IPXHF $STND $BGMD $PTNDY $CEBTF $RANJF $AHTE $VNRBP ~
ʇɐpıʍdnznʍ
29 Jan 15 19:08:02
@PaulJSingh Make easy money.... Put it in $BGMD. Buyout not far off.
daniel
29 Jan 15 18:58:58
$BGMD - will be eying for any pops into 120-130 area for fades. see how it acts in the morning.
daniel
29 Jan 15 18:57:44
1/30: $ZIOP $BGMD $GENE $PSTI $COMM $INFA $ADXS $ARRY
SPECULARI
29 Jan 15 18:39:55
#1011-1013 FREE Nailing $GENE Short $BGMD, $YHOO, $FLKS, Trades and Stubborn $TASR by InvestorsLive: http://t.co/gK4l0zJOm4 via
Jonathan Vega$
29 Jan 15 18:38:23
RT @InvestorsLive: http://t.co/W3UpLuJFYC - Posted New Video Nailing $GENE Short $BGMD $YHOO $FLKS Trades and Stubborn $TASR @chuck86014057
Trade Under Ten
29 Jan 15 18:22:41
Chart Updates 30 Jan: $BGMD $CDXS $CGA $HNSN $IMMU $MITK $SCIO $UQM #stocks #charts #trading http://t.co/j6HDDI6KvQ
Investimonials.com
29 Jan 15 18:08:23
RT @InvestorsLive: http://t.co/G8I3MeutOY - Posted a New Video Lesson: #1011-1013 FREE Nailing $GENE Short $BGMD $YHOO $FLKS Trades and Stu…
Profit.ly
29 Jan 15 18:08:12
RT @InvestorsLive: http://t.co/G8I3MeutOY - Posted a New Video Lesson: #1011-1013 FREE Nailing $GENE Short $BGMD $YHOO $FLKS Trades and Stu…
Nathan Michaud
29 Jan 15 18:05:02
http://t.co/G8I3MeutOY - Posted a New Video Lesson: #1011-1013 FREE Nailing $GENE Short $BGMD $YHOO $FLKS Trades and Stubborn $TASR
Stock Trade Alerts
29 Jan 15 17:40:11
http://t.co/BvU4QERsI5 - Amazing $GENE Alert Today & Nice $BGMD and $NVCN Gainers Too : | SH #TradeAlerts ➡ via http://t.co/8NDZbPOEMD
Stock Horizon LLC
29 Jan 15 17:34:00
New Blog Post! - Amazing $GENE Alert Today & Nice $BGMD and $NVCN Gainers Too : http://t.co/yq1mhtCfgg
Aaron faulkner
29 Jan 15 16:45:56
$FXCM advice day traders? I found a extra 150$ and want to try my hand at trading on the pumps. rookie trader $GENE $ATHX $BGMD $CRIS or no
Trent Cruz
29 Jan 15 16:07:47
@ChewbaccaStocks You were on the money with that $BGMD pick. Wish I took a bigger position.
ChartReaderE
29 Jan 15 15:25:15
$BSDM Up 60.58% today 😉 $BGMD here we come...📈💵💵💵💣
Chris Z
29 Jan 15 15:13:02
$BGMD parabolic short would love to see a gap up and push to $1.25-1.30 but how I play it (if at all) will depend on how it opens.
tweetpenny
29 Jan 15 15:09:50
RT @ckz8780: Watchlist for tomorrow: $HIMX $GENE $PHM $BGMD $PSTI
Chris Z
29 Jan 15 15:07:54
Watchlist for tomorrow: $HIMX $GENE $PHM $BGMD $PSTI
Stock Rocket
29 Jan 15 14:29:25
Today's Mid-Day Penny Stock Pick On $ETBI gained 23.27% for us! Big News: http://t.co/HCG2IUhNyd $SLP $BGMD $DEQI
Dream Team LLC
29 Jan 15 14:05:39
Watch List for Tomorrow $ALB $BGMD $HAR $PSTI .... & $GENE of course
RealTrader Network
29 Jan 15 14:01:42
Watch List for Tomorrow $ALB $BGMD $HAR $PSTI .... & $GENE of course
$tock$_R_U$
29 Jan 15 14:01:18
$NIHDQ closing at 18.37% & $BGMD closing at 11.34% 💵💵💵📈
Richard Bailey
29 Jan 15 13:19:34
RT @AlertTrade: Alert updates: $APPY +3% $BGMD +21% $GENE +149% $GEVO +5% $NVCN +9% | SH #TradeAlerts ➡ via http://t.co/8NDZbPOEMD
lucas aspen
29 Jan 15 13:10:07
$BGMD annced in the 3rd qtr conf call that they are looking for "strategic alternatives" recent move likely the result of buyers sniffing
Stock Trade Alerts
29 Jan 15 13:04:15
Alert results: $APPY +3% $BGMD +21% $GENE +149% $GEVO +5% $NVCN +16% $PSTI +1% $SILC +1% | SH #TradeAlerts ➡ via http://t.co/8NDZbPOEMD
Stock Horizon LLC
29 Jan 15 13:00:07
Alert results: http://t.co/stwlABsHeD $APPY +3% $BGMD +21% $GENE +149% $GEVO +5% $NVCN +16% $PSTI +1% $SILC +1%
Nathan Michaud
29 Jan 15 12:52:32
$BEBE I still have small swing on so far down a few cents, and $BGMD watching to scale short for a swing as well -- ideally higher first
Stockaholics
29 Jan 15 12:47:43
Our Bounce Play On $ETBI is up 22.18% from our release at $.0275! Looking for a strong close! $SLP $BGMD $DEQI
Andy L.
29 Jan 15 12:42:34
RT @ProTraderMike: $BGMD MOJO Swing 10/17 at $.45 cents now at $1.05 - take look how the MOJO small caps perform http://t.co/JBP0fDouUD htt…
ET man Trade
29 Jan 15 12:38:01
$BGMD crossed $1 today anything can happen now $TBIO as usual 10%+ close
David Veprek
29 Jan 15 12:28:04
I was way too aggressive this am and paid for it in $ZIOP, $BGMD, and $CRMD today. Chased entries.
Large Void Bot
29 Jan 15 12:16:10
15:16 Drops: $BGMD -5.6%
Stock Trade Alerts
29 Jan 15 12:02:12
Alert updates: $APPY +3% $BGMD +21% $GENE +149% $GEVO +5% $NVCN +9% | SH #TradeAlerts ➡ via http://t.co/8NDZbPOEMD
Stock Horizon LLC
29 Jan 15 12:00:04
Alert updates: $APPY +3% $BGMD +21% $GENE +149% $GEVO +5% $NVCN +9% http://t.co/xTpy1d31ui
Billy D.
29 Jan 15 11:44:25
he told me to buy $BGMD , at .80 . I passed
ThePennyCommand.com
29 Jan 15 11:33:38
http://t.co/x75OrnZD9n kajulie: $BGMD $1.06 heavy volume today: kajulie http://t.co/LvrQADUA9m http://t.co/x75OrnZD9n
Alexander Morris
29 Jan 15 11:15:33
$BGMD: 1mCrossSMA+ (1.07), 10%UpDays:21, PrvCHi+, 3:5Accel+Dy, allTFs+, ch:+13.4%[3.5%offHi], DyVol:2.1M:1.2x:1.8x, DyRng:24.3%:1.6x:2.2x
Matthew Kracht
29 Jan 15 11:04:15
RT @barna_bio: $BGMD up 150% in a week. Time to short
Stock Trade Alerts
29 Jan 15 10:40:26
Price Action Alert $BGMD - BG MEDICINE #stocks #intraday ~ via #AlertTrade
barna
29 Jan 15 10:38:07
$BGMD up 150% in a week. Time to short
Large Void Bot
29 Jan 15 10:37:11
13:37 Drops: $BGMD -5.3%
Trushift
29 Jan 15 10:28:19
Man I hate leaving $BGMD money on the table! Someone needs to invent a Stock Market DVR that only I can use.
Joe
29 Jan 15 10:27:11
$BGMD-> Just been solid for days. This stock has a history of big moves. This might just be the beginning of something special. We'll see...
SimbaTrading
29 Jan 15 10:26:15
$GENE $BGMD cancer bios are on fire.... $BSDM next in line
Nick Novak
29 Jan 15 10:22:27
RT @theturtle345: $BSDM looking a lot like $BGMD , rumor of a deal coming, upto $1...could be an interesting play $SPY
Stock Rocket
29 Jan 15 10:18:59
Our Picks Gained 117% In 3 Days And We Just Released A New Mid-Day Pick On $ETBI! Big News: http://t.co/Ita48Yhgrr $SLP $BGMD $DEQI
Bull Logic
29 Jan 15 10:18:06
RT @theturtle345: $BSDM looking a lot like $BGMD , rumor of a deal coming, upto $1...could be an interesting play $SPY
				
				
By  +Follow April 3, 2014 10:47AM
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