Houston American Energy (HUSA) stock took a beating on Wednesday after the independent oil and gas company announced an agreement with an institutional investor. This will have the company sell 223,762 shares, or pre-funded warrants, of HUSA stock to the investor for $10.60 per share, generating gross proceeds of $2.37 million.
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Houston American Energy’s decision to sell its shares for $10.60 each in this registered direct offering has upset investors. That’s because this represents a massive discount from its closing price of $20 per share yesterday. However, the shares were only trading that high after an unexpected rally over the past few days.
HUSA stock was down 24% in pre-market trading today, following an 88.68% rally yesterday. The company’s stock is up 55.04% year-to-date and 65.29% over the past 12 months. Trading was subdued today at 673,000 shares, compared to a three-month daily average of 1.35 million. The stock also experienced heavy trading yesterday at 18.27 million shares.
