NEW YORK (TheStreet) -- Shares of StemCells (STEM)  were retreating 39.23% to $1.58 in mid-morning trading on Wednesday after skyrocketing in Tuesday's trading session.

Shares soared on Tuesday after the company announced it would merge with the Israel-based private company Microbot Medical to develop robotics-based medical devices. The deal is now subject to shareholder approval.

Additionally, the Palo Alto, CA-based stem cell therapeutics company said in an SEC filing yesterday that it would accept warrant exercises from shareholders to purchase common stock. StemCells priced the offering of its common stock at a reduced value of $1.10 per share. 

The exercise period expires today at about 4 p.m. EDT. Any warrants exercised beyond that period will be honored at $10.20 per share, StemCells said. 

About 11 million shares of StemCells stock have traded so far today, above its 30-day daily average of 2.29 million shares.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

TheStreet Recommends

We rate STEMCELLS INC as a Sell with a ratings score of E+. This is based on the combination of unfavorable investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: STEM

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