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I have read that ImmunoCellular Therapeutics (IMUC) announced:

ImmunoCellular Therapeutics, Ltd. ("ImmunoCellular") (NYSE MKT: IMUC) today announced the pricing of an underwritten public offering of 5,000 shares of its Series B 8% Mandatorily Convertible Preferred Stock ("Preferred Stock") and related warrants ("Warrants") to purchase up to 9,000 shares of Preferred Stock, at a public offering price of $1,000 per share of Preferred Stock and related Warrants, for gross proceeds of approximately $5 million, excluding the proceeds, if any, from the exercise of the Warrants.

Each share of Preferred Stock is being sold together with (i) 0.6 of a Series 1 Warrant to purchase one share of Preferred Stock, (ii) 0.6 of a Series 2 Warrant to purchase one share of Preferred Stock, and (iii) 0.6 of a Series 3 Warrant to purchase one share of Preferred Stock. The Preferred Stock has an initial stated value of $1,080 and is convertible into shares of the Company's Common Stock at a conversion price equal to the lesser of (a) $1.22, subject to certain adjustments, and (b) 87.5% of the lowest volume weighted average price of the Company's Common Stock during the ten trading days ending on, and including, the date of the notice of conversion. The conversion price described in (b) is subject to a floor of?$0.35, except in the event of anti-dilution adjustments. Each Warrant will have an initial exercise price of $1,000 per share of Preferred Stock. The Series 1 Warrants, Series 2 Warrants, and Series 3 Warrants will be immediately exercisable and will expire on the three-month, six-month, and twelve-month anniversary of the original issuance date, respectively.

The Offering is expected to close on July 21, 2017, subject to the satisfaction of customary closing conditions.

Maxim Group LLC is acting as sole book-running manager for the offering. The shares are being offered pursuant to a written prospectus forming part of an effective registration statement on Form S-1 previously filed with the Securities and Exchange Commission (SEC). When available, copies of the final prospectus relating to this offering may also be obtained by contacting Maxim Group LLC, 405 Lexington Ave., New York, NY, 10174; Attn: Prospectus Department, or by Telephone: (800) 724-0761; or Email: syndicates@maximgrp.com, or by accessing the SEC's website at www.sec.gov.

Why would this cause the stock to crush so hard? What does it mean to do a public offering of convertible preferred stock and warrants?

closed as primarily opinion-based by Grade 'Eh' Bacon, quid, JoeTaxpayer Jul 18 '17 at 23:59

Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise. If this question can be reworded to fit the rules in the help center, please edit the question.

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    Note that the title question, "What does it mean when a company Announces Pricing of Public Offering of Convertible Preferred Stock and Warrants?" is answerable. However the body question, "Why would this cause the stock to crush so hard?" is not [because it is opinion based and also quite broad - a proper answer of why a particular investment moved a particular amount would require a lot of research, analysis, and good communication of that analysis]. Question would be on topic if it was reduced to the title question, and if the unnecessary details in the huge C&P were cut down. – Grade 'Eh' Bacon Jul 18 '17 at 19:32
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What does it mean to do a public offering of convertible preferred stock and warrants?

It means that the company is issuing new equity in order to raise capital, but not through a "traditional" stock offering. It is instead selling preferred stock and warrants that might turn into common equity. The preferred stock is convertible to common equity, so it should be accounted for in the total amount of stock outstanding. Warrants are similar to options in the sense that the holder has teh right (but not the obligation) to exchange the warrant for common stock, but they create new equity when exercised instead of just exchanging existing shares with the seller, so they too should be included in stock outstanding (even though they may not all get exercised), since their exercise adds shares to the market.

Why would this cause the stock to crush so hard?

The most general answer is that the new equity dilutes existing shareholder's ownership percentage, causing the stock to fall. For this particular example, there are many factors that might be in play: the conversion price of the preferred shares, the number of preferred shares and warrants issued, etc. A in-depth analysis of the offering would be necessary to fully understand the impact of the offering on existing common shares.

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    @KingsInnerSoul regarding what? I answered what the notice meant and why it would cause the stock to go down. Not sure I have the time to do an in-depth analysis on the magnitude of the drop. – D Stanley Jul 18 '17 at 18:38

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