Why NovaBay Pharmaceuticals (NBY) Stock Is Down 60%

NovaBay Pharmaceuticals Inc NBY shares are trading lower by 62% to $0.73 during Friday’s session after the company announced the pricing of its public offering of 3,200,380 shares of common stock (or pre-funded warrants) along with accompanying Series F-1, F-2, and F-3 warrants.

The combined price for each share (or pre-funded warrant) and associated warrants is $1.10. The Series F-1 warrants expire in five years, the F-2 in six months, and the F-3 in one year, each with an exercise price of $1.10 per share.

The underwriter, Ladenburg Thalmann & Co. Inc., has a 45-day option to purchase up to an additional 477,272 shares and/or warrants to cover over-allotments.

The total gross proceeds are expected to be around $3.5 million, or $4.0 million if the over-allotment option is fully exercised, before expenses. NovaBay plans to use the proceeds to redeem outstanding debentures and for general corporate purposes. The offering is set to close around July 29.

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Should I Sell My NBY Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. NovaBay Pharmaceuticals stock currently has an RSI of 25.04, indicating oversold conditions.

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NBY has a 52-week high of $44.80 and a 52-week low of $0.74.