Update (4:05 p.m.): Updated with Thursday market close information.

NEW YORK (TheStreet) -- Spherix  (SPEX) - Get Report plunged Thursday after the intellectual property development company announced a registered direct offering of preferred stock.

The company priced 10 million shares at $2 a share. Spherix expects net proceeds of approximately $18.3 million.

Spherix shares exploded Tuesday and continued to soar Wednesday after the U.S. Senate and Senate Judiciary Committee Chairman Patrick Leahy removed a patent reform bill from the committee's calendar due to a lack of bipartisan support. Leahy, a Democrat, said many of the proposals in the bill would place too much of a burden on "legitimate patent holders who employ thousands of Americans," according to Spherix's press release. 

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"The removal of this bill from the Senate Judiciary Committee schedule should remove some of the uncertainty which has been clouding our industry," said Spherix CEO Anthony Hayes. "Spherix is committed to responsibly protecting the patents it owns, and we remain eager to work with companies large and small to reach fair agreements."

The stock closed down 40.17%, or $1.39, to $2.07. More than 21 million shares changed hands, which easily beat the average volume of 1,952,580.

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