Shares of Delcath Systems Inc. (NSDQ:DCTH) slid 10 percent on Wall Street during mid-day trading on news that the company plans to sell 5 million shares of its common stock through Jefferies & Company Inc., which will act as bookrunner and solicit investors to subscribe.
DCTH shares slipped to $5.28 in mid-day trading today, down 10 percent from yesterday’s closing price of $5.87.
Delcath stock has had a number of spikes and troughs over the last year, and last month company president & CEO Eamonn Hobbs told MassDevice what might be driving the roller coaster:
Delcath is an extremely volatile stock and there a number of components to that. One is that it’s a stock that’s shareholder based, that’s dominated by retail shareholders who tend to be much more active traders. The trading volume is high and the volatility seems to be equally high. The stock seems to go up significantly on good news and down significantly on bad news — or no news.
I believe the shareholders have a lack of appreciation for how big and accessible the European and other outside-U.S. markets are for Delcath technology. The shareholder base is very U.S.-centric and U.S.-fixated. Ninety-five percent of our market opportunity happens to be outside of the U.S., which we got an approval for. We have a very significant education process to go through with the shareholders, which also includes bringing on more global shareholders. Europeans are potentially very Euro-centric. Since we’re going to be rolling out in Europe imminently, that may be of more interest to European investors than some American investors. There’s a lot of moving parts there.
The New York-based company, which won CE Mark approval in the European Union for its Chemosat targeted chemotherapy delivery device for liver cancer treatment, said it will use the funds for product commercialization, clinical trials, capital expenditures, working capital and general corporate purposes, according to the press release.