Dilution & offerings
Shelf registrations, 424B5 takedowns, and ATMs — the biotech cash tax.
Most clinical-stage biotechs lose money, so they fund themselves by issuing new shares. More shares means each existing share owns a smaller slice — dilution.
The mechanics
- Shelf registration (S-3): pre-clears the company to sell up to $X of stock later. Capacity, not an actual sale.
- Takedown (424B5): an actual offering off that shelf — dilution happening now, often priced at a discount.
- ATM (at-the-market): a continuous drip of shares sold into the open market over time.
Why it drops the price
New shares are usually sold below market to attract buyers, and the added supply plus the lower per-share value pushes the price down. Serial offerings are a red flag.
How we use it
We track offering filings as events and shares-outstanding over time as the magnitude — so you can see both when a company dilutes and how badly.
Educational only — not financial advice.