Check-Cap Ltd (NASDAQ:CHEK) Stock Continues to See Selling Pressure: A Good Buy Now?

Check-Cap Ltd (NASDAQ:CHEK) shares have dropped 31% in a month on no news.  Recently the company announced a $35 million registered direct offering to issue 25.9 million shares. The company entered definitive agreements with specific accredited institutional investors to issue 25,925,926 of its common shares and short-term warrants to buy up to 25,925,926 common shares in the direct offering. 

Check-Cap is selling each common share with a short-term common warrant at $1.35 per share and related warrant. These short-term warrants have two and 1½ term years from the issuance date, and they have an exercise price of $1.5 per common share.

The company closed then registered offering on July 2. Once the warrants are fully exercised, the company will receive around $38.9 million in additional gross proceeds. Check-Cap will use net proceeds from the offering in advancing its ongoing C-Scan clinical development. C-Scan is a screening test that detects colorectal cancer polyps.  So in the coming months, CHEK is a stick to watch.

Market Reaction:

On Friday, CHEK stock moved down 4.31% at $1.11 with more than 2.40 million shares, compared to its average volume of 3.13 million shares. The stock has moved within a range of $1.1000 – 1.1500 after opening the trade at $1.16. Over the past 52-week, the stock has been trading within a range of $0.2430 – 4.4900.