Rhythm Pharmaceuticals (RYTM) has disclosed a new risk, in the Share Price & Shareholder Rights category.
Rhythm Pharmaceuticals faces a business risk due to the subordination of its common stock to its Convertible Preferred Stock. The preferred stock, issued as part of an Investment Agreement, holds priority over common stock in dividend payments and asset distribution during liquidation. Moreover, the preferred stock’s voting rights and liquidation preference, which can increase significantly under certain conditions, could impact the strategic decisions and financial flexibility of the company. Future offerings of debt or preferred equity securities may further dilute common stockholders’ equity, potentially affecting the market price of Rhythm’s common stock.
Overall, Wall Street has a Strong Buy consensus rating on RYTM stock based on 11 Buys and 1 Hold.
To learn more about Rhythm Pharmaceuticals’ risk factors, click here.