How will the additional 139,820 RSUs dilute existing shareholders and impact earnings per share?
Dilution mechanics – The three RSU grants total 139,820 shares. BridgeBio currently has roughly 6.5 – 7.0 million shares outstanding (the latest public filings show ~6.6 M). Adding the new units therefore represents ≈2.0 % – 2.2 % incremental dilution. Because only ¼ of the RSUs vest on 16 Aug 2026 and the balance vests in equal quarterly installments thereafter, the dilution will be spread over the next 12‑18 months rather than hitting the market in a single burst.
Effect on EPS – Assuming BridgeBio’s FY‑2025 net income remains unchanged, the 2 % rise in the share count will lower earnings‑per‑share by roughly the same magnitude (≈‑2 %). For example, with a reported EPS of $0.45, the diluted EPS would fall to about $0.44 after the first vesting tranche and to roughly $0.43 once all RSUs are fully vested. The impact is modest, but it does shave a small amount off the profit‑per‑share metric that analysts watch.
Trading implications –
* Short‑term price pressure: The announcement adds a modest, predictable dilution that may cause a slight downward adjustment in the share price (typically 1‑2 %). In a thinly‑traded biotech, that could be enough for a short‑term sell‑off, especially if the market is already risk‑off.
* Technical outlook: BBIO’s chart is currently trading near its 50‑day moving average with a neutral RSI (~48). A breach below the 20‑day EMA with volume could trigger a brief correction; a hold above the 200‑day EMA would signal that the dilution is already priced in.
* Fundamental view: The RSU grants are a standard recruitment tool for a fast‑growing R&D pipeline and do not alter cash‑flow. As long as the pipeline continues to advance and revenue expectations stay intact, the dilution is a secondary concern. Investors with a longer horizon may view the modest EPS hit as an acceptable trade‑off for the talent boost.
Actionable take‑away: If you are already long, consider tightening stops just below the 20‑day EMA to protect against a short‑term dip. For new entries, a “buy‑the‑dip” around a 3‑5 % pull‑back could be justified, provided you are comfortable with the slight EPS dilution and the underlying clinical catalysts.