Why Quantum-Si Stock Flopped on Friday
Key Points
The niche healthcare tech company would like to raise more capital.
Late Thursday, it filed a shelf registration statement stating this intention.
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Quantum-Si's (NASDAQ: QSI) shares weren't quite the picture of health as the trading week came to an end. Investors, concerned about the healthcare technology company potentially making dilutive secondary share issues, traded out of the stock to leave it with a nearly 5% loss on the day.
Sitting on the shelf
Late Thursday, Quantum-Si filed a shelf registration -- a regulatory document stating that a company aims to raise capital over time -- with the Securities and Exchange Commission (SEC).
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The company, which specializes in the fairly niche science of protein sequencing, aims to raise up to $300 million via the flotation of one or more types of security. In the filing, Quantum-Si listed Class A common stock, preferred stock, debt securities (it didn't get more specific), rights, and units as possibilities.
In the document the company said it "will retain broad discretion," over the proceeds from sales of these securities. Some uses might include product development and commercialization, capital expenditures, and administrative expenses, it added.
Dilution fears creeping in
A shelf registration is a vague document, in that it effectively only announces the intention to raise capital, without many details. That said, Quantum-Si's market cap is $336 million, so if management decides to raise anywhere close to that $300 million in the form of equity, dilution could become an issue. Investors were clearly at least somewhat worried about that possibility.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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