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Shares of biotech firm Scholar Rock Holding Corp. ($SRRK) dropped more than 9% on Tuesday following a massive 300% surge the previous day.
The company unveiled a $275 million underwritten public offering. Scholar Rock plans to offer both common stock and pre-funded warrants to investors, and said it will use the proceeds to fund the commercialization of its lead muscle-targeted therapy, apitegromab, as well as other clinical programs.
The offering is being managed by J.P. Morgan Securities LLC, Jefferies LLC, and Piper Sandler & Co., with BMO Capital, Wedbush Securities, and Raymond James serving as co-managers.
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On Stocktwits, retail sentiment crashed to ‘extremely bearish’ (7/100) levels from ‘extremely bullish’ a day earlier following the news.
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Scholar Rock’s move comes on the heels of its recent breakthrough in the Phase 3 trial of apitegromab, designed to treat spinal muscular atrophy (SMA).
The trial results showed a significant improvement in motor function, sending the stock soaring to levels last seen in November 2021.
The stock’s dramatic rise has also drawn considerable attention from retail investors.
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The company’s following on Stocktwits surged by 77% within 24 hours of the trial announcement, while weekly message volume spiked by an astounding 117,700%.
SRRK shares are up over 75% year-to-date.
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