CollabRx (CLRX) Stock Plummets Today After Pricing Public Offering of Common Stock

NEW YORK (TheStreet) -- Shares of CollabRx  (CLRX) plummeted 30.45% to $1.55 in morning trading Thursday after the healthcare technology priced a public offering of common stock.

The company priced 2,362,205 shares of its common stock at $1.27 per share. CollabRx expects gross proceeds of approximately $3 million. The offering contains a 45-day option for underwriters to purchase up to an additional 354,330 shares to cover any over-allotments.

This is the second public offering from CollabRx in a week. Last Thursday, the company priced an offering of 3.84 million shares of common stock at $1.25 a share and warrants to purchase up to an aggregate of 3.84 million shares of its common stock at a price of $0.0001 per warrant. The warrants had a per share exercise price of $1.56. The warrants are exercisable immediately and will expire five years from the date of issuance.

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CollabRx expected gross proceeds from the offering of $4.8 million. The offering contained a 45-day option for underwriters to purchase up to an additional 576,000 shares of common stock and/or 576,000 additional warrants to cover any over-allotments.

Last week's offering closed on Wednesday.

Separately, TheStreet Ratings team rates COLLABRX INC as a "sell" with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate COLLABRX INC (CLRX) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Technology industry. The net income has significantly decreased by 80.5% when compared to the same quarter one year ago, falling from -$0.56 million to -$1.02 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Technology industry and the overall market, COLLABRX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$0.92 million or 46.32% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • CLRX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 44.42%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The revenue fell significantly faster than the industry average of 23.6%. Since the same quarter one year prior, revenues fell by 29.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: CLRX Ratings Report

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