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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for BGMD
Bilo Selhi
30 Mar 15 02:18:29
Bilo Selhi alerted $VBLT +19% http://t.co/1EpXUQFsaj SEE TRACK RECORD http://t.co/W3gditBjAt $EKSO $DRRX $CARA $NVAX $BGMD $CNAT $TRV
Bilo Selhi
30 Mar 15 02:03:28
Bilo Selhi alerted $HOTR +23% http://t.co/bV3IRV1UNV SEE TRACK RECORD http://t.co/W3gditBjAt $EKSO $DRRX $CARA $NVAX $BGMD $CNAT $TRV
Stockaholics
30 Mar 15 01:37:07
Our Stock Tips Have Gained Over 230% Within 2 Days! Huge News: http://t.co/FW1zCk5dfw $SLP $BGMD $DEQI
Stock Rocket
30 Mar 15 00:55:51
Our Penny Stock Newsletter Picks Gained Over 1485%! Huge Update: http://t.co/cDuleLERch $SLP $BGMD $DEQI
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30 Mar 15 00:37:37
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Bilo Selhi
30 Mar 15 00:03:25
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29 Mar 15 23:48:24
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29 Mar 15 23:32:04
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Bilo Selhi
29 Mar 15 23:18:24
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Joseph Hsieh
29 Mar 15 22:02:13
Penny stocks might become momo next week. $BGMD $CYRN
Bilo Selhi
29 Mar 15 21:03:20
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Bilo Selhi
29 Mar 15 19:15:47
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chartseer
29 Mar 15 18:49:15
RT @JJJpennycharts: watcher for 3/30/15.... $BGMD $CANF $CRMD $DRRX $GHDC $IGRW $IMRS $OWOO $TRTC $VCSY
Greg David
29 Mar 15 18:34:23
http://t.co/RMvVXnJDpv does trade alerts differently than anyone else. Its super cool. $EJ $EPXY $TRTC $CYTX $BGMD
Penny Stockington
29 Mar 15 18:15:56
Our Penny Stock Pick On $RCGP Gained As Much As 236% In 2 Days! Get Our Next Pick Early: http://t.co/22aEoRaezM $SLP $BGMD $DEQI
Bilo Selhi
29 Mar 15 18:00:44
Subscribers alerted to $FOMX +17% SEE TRACK RECORD http://t.co/MbXUvymcJk $BGMD $CNAT $TRVN $NWBO $SCMP
Stockaholics
29 Mar 15 17:59:32
Our Stock Tips Have Gained Over 230% Within 2 Days! Huge News: http://t.co/FW1zCk5dfw $SLP $BGMD $DEQI
StockenheimerSchmidt
29 Mar 15 17:55:14
$RCGP tripled in value within 2 days as of yesterdays high! high! Big News: http://t.co/RWkbY02YnU $SLP $BGMD $DEQI
TradersChat.org
29 Mar 15 17:45:01
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Stock Rocket
29 Mar 15 17:18:18
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Bilo Selhi
29 Mar 15 17:00:42
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AK
29 Mar 15 16:42:38
RT @TheTradingNinja: While everyone is sleeping in la la land always be up studying researching from top to bottom... $BRWC $BGMD DOUBLE B'…
Eli Pritsker
29 Mar 15 16:21:33
RT @ckz8780: Weekly review and watchlist for tomorrow: http://t.co/fee9jKGD2f $FWm $GENE $BGMD $NPTN | Go and revel in the sexiness that is…
Chris Z
29 Mar 15 16:08:56
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TV_Trading Ideas
29 Mar 15 14:10:13
Risk trend for b/o $BGMD http://t.co/FD1yPJbAx0
whutrades
29 Mar 15 14:03:10
3/30 Weekly Watch list: $BGMD $OCLR $PLNR $RLGT $SYMX $UNIS (T/L charts + Ich Cloud (full-slow))
Trade Under Ten
29 Mar 15 13:55:49
Chart Updates 30 Mar: $ACCO $AOI $BCLI $BGMD $CRC $DRRX $IMRS $MXWL $RAD #stocks #charts #trading http://t.co/jggJw5lAMS
Trading-Pennies
29 Mar 15 13:42:02
Joey Joe Joe Junior always has good stocks of interest: Look at the following from him: $BGMD $DRRX as well as those we both share
Katsu
29 Mar 15 12:00:07
$BGMD one more push
Bilo Selhi
29 Mar 15 11:23:07
Want to consistently find trades like $CAPN +30%? http://t.co/uAcamNRUPt http://t.co/mAugeN0wA4 $NVGN $EKSO $DRRX $CARA $NVAX $BGMD $CNAT
Eli Pritsker
29 Mar 15 11:14:35
RT @JJJpennycharts: watcher for 3/30/15.... $BGMD $CANF $CRMD $DRRX $GHDC $IGRW $IMRS $OWOO $TRTC $VCSY
FeedMeShares
29 Mar 15 11:02:47
RT @TheTradingNinja: If your interested in what I'm playing this week ... My two Double D's 🐒 $BRWC and $BGMD watch these for the next two …
AlbyRightBack
29 Mar 15 10:26:37
RT @TheTradingNinja: If your interested in what I'm playing this week ... My two Double D's 🐒 $BRWC and $BGMD watch these for the next two …
Dan
29 Mar 15 10:25:02
RT @JJJpennycharts: watcher for 3/30/15.... $BGMD $CANF $CRMD $DRRX $GHDC $IGRW $IMRS $OWOO $TRTC $VCSY
The Trading Ninja
29 Mar 15 10:15:51
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Joey Joe Joe Junior
29 Mar 15 10:04:36
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FitCal
29 Mar 15 09:03:49
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Vesta Fulvio
29 Mar 15 08:56:51
RT @FitCalENGLISH: DayTraderChoice: thelionwarrior: $BGMD! Big run coming!!! 10k and big news http://t.co/RtQOtDl8vk
FitCal
29 Mar 15 08:47:48
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FitCal
29 Mar 15 08:47:48
Hot_pennyalert: thelionwarrior: $BGMD! Big run coming!!! 10k and big news http://t.co/RtQOtDl8vk
FitCal
29 Mar 15 08:47:47
OTP_Group1: #DOW http://t.co/0zYEmE5YDk thelionwarrior: $BGMD! Big run coming!!! 10k and big ne... http://t.co/HiTkr8R4o9 …
DayTraderChoice
29 Mar 15 08:35:31
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HotStockAlert $PKGM$
29 Mar 15 08:35:28
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HotStockAlert $PKGM$
29 Mar 15 08:33:03
thelionwarrior: $ $BGMD 10 K coming out Tuesday. Big http://t.co/khK3udZNDi
DayTraderChoice
29 Mar 15 08:33:02
thelionwarrior: $ $BGMD 10 K coming out Tuesday. Big http://t.co/8GKYNKk2yh
OTPGroupLLC.com
29 Mar 15 08:32:52
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Bilo Selhi
29 Mar 15 06:46:14
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DayTraderChoice
29 Mar 15 05:49:35
TheTradingNinja: $BRWC $BGMD for weeks to come http://t.co/ZfmEDz6XBx
HotStockAlert $PKGM$
29 Mar 15 05:49:34
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MyStockTargEt!$$
29 Mar 15 05:49:33
TheTradingNinja: $BRWC $BGMD for weeks to come http://t.co/1TDna2Wfau
				
				
By  +Follow April 3, 2014 10:47AM
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