Why Are These Steel And Biotech Stocks Deep In Red Today?

Great Basin Scientific Inc (NASDAQ:GBSN) took a nosedive this morning, after two law firms announced investigations into alleged securities fraud related to the company’s public offering back in February. Robbins Arroyo LLP and Levi & Korsinsky, LLP are investigating whether the company management has violated federal securities laws when it approved the offering of 2,724,000 units, which could be converted into preferred stock and warrants. The company was thus forced to issue a large amount of shares, leading to a considerable dilution, causing losses for existing shareholders.

Great Basin Scientific Inc (NASDAQ:GBSN) is not a popular stock among hedge funds, with only three of them reporting a stake in the company in the last round of 13F filings, unchanged over the quarter. Ross Berman is bullish on the stock, having massively increased his holding during the quarter to 66,537 shares worth $405,000.

Investors are not impressed by Northwest Biotherapeutics, Inc (NASDAQ:NWBO)‘s latest deal to raise funds, driving the stock lower by as much as 21% during the first hours of trading today. The company announced a deal with healthcare focused institutional investors for a direct offer of 3.5 million shares of common stock at a price of $3.60 per share, which would bring approximately $12.6 million into the coffers. Investors will also receive warrants to purchase an additional 1.75 million shares at an exercise price of $4.50 per share. In other news, Shareholder rights law firm Robbins Arroyo LLP said yesterday that it has filed a suit against Northwest Biotherapeutics for allegedly misleading investors by making false statements regarding the business prospects of the company.

The fan club of Northwest Biotherapeutics, Inc (NASDAQ:NWBO) among the funds we track grew by three new members during the third quarter, with 12 top hedge funds holding a total of 27.5% of the company’s outstanding stock. Neil Woodford sees great upside potential in Northwest Biotherapeutics, having initiated and built a sizable position in the company over the third quarter, which accounts for nearly 8% of his portfolio. According to its latest 13F filing, Woodford Investment Management holds 20.5 million shares valued at approximately $128 million.

Seres Therapeutics Inc (NASDAQ:MCRB) is another biotechnology stock that is dwelling in the red today, after shares opened lower and fell by as much as 7% during the first hour of trading. The stock has been recently upgraded by Zacks Investment Research to a Hold from the previous Sell rating. The company went public in the beginning of June 2015, reaching a high of $51.40, but has fallen by nearly 30% since then, with shares currently trading at $36 apiece.

Peter Kolchinsky‘s RA Capital Management holds the largest stake in Seres Therapeutics Inc (NASDAQ:MCRB) among the funds we track: 246,645 shares valued at $7.31 million according to its latest quarterly report. Hedge funds from our database have a weak presence among the shareholders of Seres Therapeutics Inc (NASDAQ:MCRB), as only 10 funds reported holding just 3.7% of the company’s common stock as of the end of September.

Disclosure: none.