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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
On Fire
19 Sep 14 10:12:21
@momzdaytrading $BGMD being hearing bottomed for last month now. Still going down
Stock Rocket
19 Sep 14 02:33:44
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $SLP $BGMD $DEQI
Stock Rocket
19 Sep 14 00:08:05
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $SLP $BGMD $DEQI
Stock Rocket
18 Sep 14 21:15:06
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/h5N34SPJ6o $SLP $BGMD $DEQI
Daily Contracts
18 Sep 14 10:24:01
Real-Time feed of company contracts, original agreements and executive updates from Bg Medicine $BGMD http://t.co/lsVuKAAjEz
chartguy89
18 Sep 14 05:22:03
BGMD 0.5912 Stock Charts $BGMD BG Medicine Inc. (NASDAQ) Last Updated: 09/18/2014 07:22:10 BGMD Stock Chart - http://t.co/UMw6SeS5RL
Stock Rocket
17 Sep 14 23:36:13
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $SLP $BGMD $DEQI
Stock Rocket
17 Sep 14 15:14:18
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $SLP $BGMD $DEQI
Stock Rocket
17 Sep 14 12:44:47
$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $SLP $BGMD $DEQI
Momz Day Trading
17 Sep 14 10:47:02
$BGMD bottomed?
Stockaholics
17 Sep 14 10:30:32
$RSII gained 150% in 4 days! Get our top penny stock picks early: http://t.co/iSqL7zgTT1 $SLP $BGMD $DEQI
SPbiotech
17 Sep 14 06:53:19
Commercializing new #diagnostics isn't easy: $BGMD cautionary tale http://t.co/Qojls6FDEt
biotech 2050
17 Sep 14 02:31:19
RT @adamfeuerstein: SEC says RA Capital violated Rule 105 on $HALO $CTIC $SGMO $SNTA $ACHN $IMGN $CLDA $MELA $OGXI $EXAS $GTXI $VVUS $BGMD …
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16 Sep 14 20:02:51
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16 Sep 14 12:15:56
$BRNW Ran Up 145% So Far Today! Huge News: http://t.co/0NGNmaYblA $SLP $BGMD $DEQI
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16 Sep 14 10:41:05
$BRNW Ran Up 145% So Far Today! Huge News: http://t.co/agBJ7Ngnzq $SLP $BGMD $DEQI
Lori Weiman
16 Sep 14 09:28:44
RT @adamfeuerstein: SEC says RA Capital violated Rule 105 on $HALO $CTIC $SGMO $SNTA $ACHN $IMGN $CLDA $MELA $OGXI $EXAS $GTXI $VVUS $BGMD …
Jeff Wright
16 Sep 14 09:09:04
RT @adamfeuerstein: SEC says RA Capital violated Rule 105 on $HALO $CTIC $SGMO $SNTA $ACHN $IMGN $CLDA $MELA $OGXI $EXAS $GTXI $VVUS $BGMD …
Harry Wanger
16 Sep 14 08:50:14
RT @adamfeuerstein: SEC says RA Capital violated Rule 105 on $HALO $CTIC $SGMO $SNTA $ACHN $IMGN $CLDA $MELA $OGXI $EXAS $GTXI $VVUS $BGMD …
Adam Feuerstein
16 Sep 14 08:48:13
SEC says RA Capital violated Rule 105 on $HALO $CTIC $SGMO $SNTA $ACHN $IMGN $CLDA $MELA $OGXI $EXAS $GTXI $VVUS $BGMD $KERX $INSM
Steve Walker
16 Sep 14 08:07:44
$BGMD Did I miss some bad news somewhere?
Steve Walker
16 Sep 14 08:03:15
$BGMD What the ???
Stockaholics
16 Sep 14 00:53:10
$AZFL Gained 68.2% In Just 3 Days, After Our Penny Stock Alert! Huge Update: http://t.co/f6EXGyxEe9 $SLP $BGMD $DEQI
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15 Sep 14 18:32:13
Our SECRET Alert on $INOH Closed Up 60% For Platinum Members Today! Major News: https://t.co/HzD6J3YtmW $SLP $BGMD $DEQI
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15 Sep 14 15:14:21
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Don Seiffert
15 Sep 14 12:18:36
Biggest gainers & losers among Bay State biotechs $ALNY $NVIV $ALDX $TTPH $BGMD $RXII http://t.co/ZMgMWjq6uP
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15 Sep 14 11:42:12
$DKAM Shot Up 150% And Has Seen Over 400 MILLION Volume Today! Huge News: http://t.co/PmkoXscmSi $SLP $BGMD $DEQI
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15 Sep 14 08:44:10
We just released a major mid-day alert on MLHC! Check it out: http://t.co/zPRXsXfAGO $SLP $BGMD $DEQI
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15 Sep 14 01:33:07
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14 Sep 14 00:57:06
$VOIS Surged Up 191.7% In The Past Week! Subscribe to Our Newsletter Alerts: http://t.co/XkL8Re7uuZ $SLP $BGMD $DEQI
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13 Sep 14 18:17:35
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$Stocknewsalerts
13 Sep 14 09:03:28
$BGMD Information for BG Medicine, Inc. From our Stock News Alerts App
Stockaholics
13 Sep 14 06:25:12
$VOIS Surged Up 191.7% In The Past Week! Subscribe to Our Newsletter Alerts: http://t.co/XkL8Re7uuZ $SLP $BGMD $DEQI
Steve Walker
12 Sep 14 16:42:07
$BGMD reduces unnecessary sales / marketing expenses by $1.9 million in anticipation of FDA approval of automated Galectin-3 Test.
Stockaholics
12 Sep 14 12:16:56
$VOIS Surged Up 191.7% In The Past Week! Subscribe to Our Newsletter Alerts: http://t.co/XkL8Re7uuZ $SLP $BGMD $DEQI
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12 Sep 14 01:58:37
$TSPG Is Up 500% In The Past 2 Weeks! Special Update: http://t.co/Uw0BliZuF1 $SLP $BGMD $DEQI
Stockaholics
11 Sep 14 14:59:26
$VOIS Gained As Much As 64.71% Today! Huge News: http://t.co/GNemSzHkIS $SLP $BGMD $DEQI
$Stocknewsalerts
11 Sep 14 14:30:56
$BGMD New SEC Document(s) for BG Medicine, Inc. From our Stock News Alerts App
moderneconomist.com
11 Sep 14 14:30:06
RT @VexTrades: $BGMD - Reduction of ~55% of Workforce (12 Employees); Sees ~$300K One-Time Related Charge.
Pzaa...Guy
11 Sep 14 14:25:22
$BGMD - Current Report Filing (8-k) http://t.co/YXLzDgXw0y
VisualStock Resource
11 Sep 14 14:25:17
$BGMD - Current Report Filing (8-k) http://t.co/CYP2kGeWoN
4-traders.com
11 Sep 14 14:25:04
BG MEDICINE : Costs Associated with Exit or Disposal Activities, Notice of Delisting or Failure to Satisfy ... http://t.co/2kThcWFSpj $BGMD
Brandon Hayward
11 Sep 14 14:24:53
$BGMD - Reduction of ~55% of Workforce (12 Employees); Sees ~$300K One-Time Related Charge.
MAISA
11 Sep 14 14:24:18
$BGMD The first automated galectin-3 test is expected to be launched in the United States in 2015.
BV Healthcare
11 Sep 14 14:22:11
$BGMD Bg Medicine, Inc files Form 8-K (Events or Changes Between Quarterly Reports) SEC Filing.. http://t.co/WumVSochGn
				
				
By  +Follow April 3, 2014 10:47AM
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