Avenue Therapeutics (NASDAQ:ATXI) shares are trading lower by 20.7% to $4.92 during Monday's session after the company announced the exercise of warrants for $4.4 million in gross proceeds.

These warrants were issued at different times with various exercise prices, but the warrant holders have agreed to exercise them at a reduced price of $6.20 per share. The company expects to receive approximately $4.4 million in gross proceeds from this exercise.

In return for exercising the warrants, Avenue will issue new unregistered Series C and Series D warrants to the warrant holders, each allowing them to purchase up to 689,680 shares of common stock at an exercise price of $6.20 per share.

The new Series C warrants will be exercisable immediately and valid for five years, while the Series D warrants will be exercisable immediately but valid for eighteen months. The transaction is expected to close around May 1, 2024, subject to standard closing conditions.

Should I Sell My ATXI Stock?

When deciding to hold on to or sell a stock, investors should consider their time horizon, unrealized gains and total return.

Shares of Avenue Therapeutics have decreased by 93.29% in the past year. An investor who bought shares of Avenue Therapeutics at the beginning of the year would take a loss of $7.05 per share if they sold it today. The stock has fallen 56.03% over the past month, meaning an investor who bought shares on Mar. 1 would see a capital loss of $6.95.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Avenue Therapeutics stock currently has an RSI of 27.91, indicating oversold conditions.

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ATXI has a 52-week high of $93.75 and a 52-week low of $4.77.