Rhythm Pharmaceuticals’ Common Stock Faces Risks from Convertible Preferred Stock Supremacy

Rhythm Pharmaceuticals (RYTM) has disclosed a new risk, in the Share Price & Shareholder Rights category.

Rhythm Pharmaceuticals faces a significant risk due to the subordination of its common stock to its Convertible Preferred Stock, which ranks senior in terms of dividends and asset distribution upon liquidation. This structure could potentially limit the financial returns to common stockholders and restrict the company’s flexibility in future equity offerings. Any additional issuance of preferred stock might further dilute the value of common stock, affecting its market price negatively. Consequently, common stockholders are exposed to the risk of diminished returns and influence within the company’s governance framework.

The average RYTM stock price target is $64.75, implying 3.35% upside potential.

To learn more about Rhythm Pharmaceuticals’ risk factors, click here.