The announcement of a rights offering is generally seen as a positive by many investors but the announcement with regards to the same from Rare Element Resources Ltd (OTCMKTS:REEMF) last Friday could not arrest the slide in the stock. The stock was one of the notable laggards last week and ended with losses of 16% for the period.
Market Action
On Friday, REEMF stock ended lower by 2.13% to $0.92 with 321K shares, compared to its average volume of 327K shares. The stock has moved within a range of $0.9005 – 1.0000 after opening trade at $0.95.
Announces Results of Oversubscribed Rights Offering of Common Shares
However, it may be a good idea for investors to take a closer look at the announcement made by Rare Element Resources on Friday. The company announced that the rights offering for its common shares had been oversubscribed and had managed to bring in as much as $25.4 million in the form of gross proceeds.
In this regard it is necessary to point out that the rights offering had actually expired on December 8 and since the shares had been oversubscribed, the shares are going to be allocated proportionally among shareholders once they are issued. The fact that the rights offering was oversubscribed was an important development and one that investors need to keep in mind when they look into the Rare Element Resources stock. At this point, it may be a good idea to keep an eye on the stock and see if it rebounds this week.
Traders Note
REEMF stock is trading below the 20-Day and 50-Day Moving averages of $1.10 and $1.59. Moreover, the stock is trading is the oversold zone with RSI stands at 40. The stock is down 47% over the past month.
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