Why has the Mesoblast share price tumbled 10% so far in August?

The Mesoblast Limited (ASX: MSB) share price has come crashing down recently, tumbling 9.57% since the end of last month.

Much of that fall came amid a capital raise that saw shares in the biotechnology company offered for 75 cents each. The slump also follows a 54% surge in the Mesoblast share price during July.

The Mesoblast share price closed at 85 cents on Wednesday, down from 94 cents at the end of last month.

For context, the All Ordinaries Index (ASX: XAO) has lifted 0.9% so far this month.

So, what’s been weighing on the Mesoblast share price lately? Let’s take a look.

What’s been dragging on the Mesoblast share price lately?

Interestingly, the Mesoblast share price has plunged this month despite not trading for much of the first fortnight.

The stock entered a trading halt before the market opened on 4 August and didn’t return to trade until the following week.

At the time, the company told the market its shares were halted as it underwent a private placement. Though, all details of such a placement remained a secret until it returned to trade.

It wasn’t until 9 August that Mesoblast announced it had completed the capital raise. The placement saw its coffers injected with an additional $65 million after it sold 86.7 million new shares for 75 cents apiece.

The funds were partially earmarked to go towards launching the company’s lead drug candidate, remestemcel-L. Some of the cash will also be used to fund the phase three trial of its rexlemestrocel-L.

The Mesoblast share price plummeted 6.4% the day it was removed from the freezer.

It’s also worth noting Mesoblast released its most recent quarterly activities and cash flow report in the final session of last month. Its stock slipped 2% that day. Thus, some of its August slump may have been representative of a belated reaction to the release.  

At least the stock is well versed in trading in the red. It has tumbled 40% since the start of 2022. It’s also currently 57% lower than it was this time last year.

For comparison, the All Ordinaries has dropped 9% year to date and 7% over the last 12 months.

The post Why has the Mesoblast share price tumbled 10% so far in August? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Why Block, CBA, Mesoblast, and NAB shares are dropping today
• Mesoblast share price slides 8% following $65m capital injection
• Why is the Mesoblast share price still not moving today?
• These are the 10 most shorted ASX shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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