Professional Diversity Network (NASDAQ:IPDN) Stock Falls Sharply: Time To Sell?

Direct offerings can often be a tricky thing for companies and so it proved for Professional Diversity Network (NASDAQ:IPDN). Yesterday, the company announced that it has signed agreement with institutional investors with regards to the sale and purchase of the Professional Diversity Network common stock.

As per the provisions of the agreement, the company is going to offer its common stock in a registered direct offering at $1.70 a share in order to raise gross proceeds to as much as $2.5 million. The direct offering is going to be closed on July 9, 2021.

However, the announcement did not particularly prove to be a hit among investors and the Professional Diversity Network stock suffered a decline of 15% amidst a selloff.

The company also announced that a prospectus supplement which is going to describe the terms of this registered direct offering is also going to be submitted by the company to the United States Securities and Exchange Commission. While the announcement may not have come as a boost for the Professional Diversity Network stock, it remains to be seen how the stock reacts after the offering is closed. In the meantime, investors could consider keeping an eye on the stock.

Market Reaction:

On Wednesday, IPDN stock fell 21% at $1.68 with more than 2.90 million shares, compared to its average volume of 706k shares. The stock had moved within a range of $1.9000 – 2.0300 after opening the trade at $1.93. Over the past 52-week, the stock has been trading within a range of $0.7600 – 5.5600.