CytRx Corporation (CYTR) announced public offering of 39,200,000 shares of common stock and warrants to purchase up to 39,200,000 shares of common stock at a combined public offering price of $0.52 per share and related warrant for gross proceeds of approximately $20.4 million.
CytRx’s stock has years of history of under performing based on the amount of capital risen. Company operated at a loss due to their ongoing expenditures for research and development of their product candidates and for general and administrative purposes and lack of significant recurring revenue.
Look at filings: net losses of $4.8 million , $27.0 million , and $21.9 million for the years ended December 31, 2009 , 2008 and 2007, respectively, and $3.7 million for the nine months ended September 30, 2010. Company had of approximately $200.7 million an accumulated deficit as of September 30, 2010.
What do you think? Forget about this continuous dilutor?
Well, “One Man’s Trash Is Another Man’s Treasure“. We believe that CYTR should bounce at least 15-20% short term. Why? Look at reasons below:
- CYTR plummeted 35% in one trading session;
- CYTR needs volume to fulfill rest of offering;
- CYTR required to bring share price to over $1 (5 months left?) to stay on Nasdaq.
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