Why U.S. Gold Shares Are Trading Lower

U.S. Gold Corp USAU shares are trading lower by 10.7% to $3.96 Monday afternoon after the company announced a $4.9 million registered direct offering.

The securities purchase agreement is bring conducted with investors for the sale of 1.4 million shares of common stock at $3.50 per share, totaling approximately $4.9 million. Additionally, the agreement includes unregistered warrants to purchase 1,400,000 shares at an exercise price of $4.48 per share.

These warrants will be exercisable six months after issuance and expire five years from the initial exercise date. The closing of the sale is anticipated around April 19, pending customary closing conditions.

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Is USAU A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like U.S. Gold‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. U.S. Gold does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on U.S. Gold will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

According to data from Benzinga Pro, USAU has a 52-week high of $5.21 and a 52-week low of $2.92.