Hearing implant maker Envoy Medical plunges 40% on new stock and warrant issue

Quotes of hearing implant developer Envoy Medical, whose capitalization on the Nasdaq is slightly above $22 million, collapsed yesterday, October 8, almost 42%. The selloff started after the company announced an additional share issue worth $4 million and warrants for another $12 million.

Shares of Envoy Medical fell nearly 42% to $0.93 per share yesterday, with 12.3 million shares changing hands, 4.4 times higher than the average daily trading volume, according to Yahoo Finance data. In premarket trading today, the selloff continued, with the stock price down about another 3%.

The company said it will sell 3 million shares directly to investors at $1.33 per share, as well as issue two-year warrants for more than 9 million additional shares with the same exercise price. Envoy expects to raise $4 million, and if the warrants are fully exercised, another $12 million. The company intends to use the proceeds for working capital and other general corporate purposes, the press release said. The transaction is expected to close today.

Envoy Medical develops fully implanted hearing systems for patients with moderate to profound hearing loss. The company’s first device, the Esteem middle ear implant, has been approved by the U.S. Food and Drug Administration. However, it is not yet covered by insurance programs. Lawmakers in both chambers of Congress have reintroduced a bill to classify such implants as prosthetic devices eligible for Medicare reimbursement, but it has yet to become law.

The company’s second core project, the Acclaim cochlear implant, is an investigational fully implanted device for patients whose hearing loss cannot be corrected with hearing aids. In October, Envoy received FDA approval to expand its pivotal clinical trial to the final stage after submitting favorable three-month data from the first 10 participants. The company expects to complete enrollment by early 2026, which would cut its projected capital needs by $10-15 million. 

According to its latest quarterly report, Envoy’s net loss widened 46% year over year in the second quarter to $5.7 million, while revenue increased 15% to $78,000.

Envoy Medical shares have fallen 68% over the last 12 months. Even so, analysts remain bullish: both analysts who cover the stock rate it a “buy,” MarketWatch data shows (a month ago there were three "buy" recommendations). The average target price is $6.50 per share, implying upside of nearly sevenfold from current levels.

The AI translation of this story was reviewed by a human editor.