Ten Big Secondary Stock Offerings at Once, Almost $1.7 Billion Total (BNNY, TEU, EROC, ESC, HTWR, IMRS, STNG, SUI, WAGE, YNDX)
As the stock market keeps rising and rising, investors need to pay attention to how many companies are raising capital via secondary stock offerings. Some of these secondary stock offerings are for the benefit of the company, and others are for the benefit of the corporate insiders or backers who are able to sell shares while the market is strong.
Below are just some of the offerings we have seen today, but be advised that this represents a sum of close to $1.7 billion in gross sales that has to be absorbed by equity buyers. It is also after eight straight days of gains on the Dow Jones Industrial Average.
Annie’s Inc. (NYSE: BNNY) is back at the fountain and sold 3,500,000 shares at a price to the public of $40.00 per share. Be advised that these shares were sold exclusively by participating selling stockholders. The stock is down 3.7% at $39.79 and is down about $9 from its prior post-IPO high since the company has sold stock and had some food quality issues.
Box Ships Inc. (NYSE: TEU) sold 4 million common shares at $5.25 per share for gross proceeds of about $21 million, versus a $124 million market cap. The company plans to use the proceeds of the offering for general corporate purposes, such as the repayment of debt and the acquisition of ships.
Eagle Rock Energy Partners L.P. (NASDAQ: EROC) joined the master limited partnerships (MLPs) in selling units and bumped the offering up to 9 million units at $9.31 per unit. The reaction has the listed units down more than 3% from yesterday’s close at $9.32. Eagle Rock said that it intends to use the net proceeds to repay a portion of the outstanding borrowings under its credit facility. Be advised that the distribution yield here is about 9.2%.
Emeritus Corp. (NYSE: ESC) sold 7.97 million shares of common stock on behalf of the senior living services provider at $27.00 per share, versus the $27.54 closing price yesterday. Be advised that these shares were sold by affiliates of AREA Property Partners. Also be advised that the CEO and directors also were selling shares here. The company itself granted the underwriters a 30-day overallotment option to purchase up to an additional 1,196,040 common shares, and those proceeds (if exercised) would be used for general corporate purposes. Shares are down 2% at $26.96 against a 52-week range of $14.24 to $30.95.
HeartWare International Inc. (NASDAQ: HTWR) sold 1.5 million shares at $86.45, which was at yesterday’s closing bell price. This is an extra 10% of the float, but the proceeds are for the company itself, which is planning to use the net proceeds for working capital and general corporate purposes.
IMRIS Inc. (NASDAQ: IMRS) sold 5.75 million shares at $3.50 per share to raise just over $20 million. Shares are down at $3.29 after the offering. The good news is that IMRIS intends to use the net proceeds from this offering for working capital and general corporate purposes.
Scorpio Tankers Inc. (NYSE: STNG) sold a whopping 29.01 million shares at $8.10, versus an $8.53 close. Shares are only down 0.9% at $8.45 after the offering. Be advised that a firm we are unaware of named RS Platou Markets was the sole manager and lead placement agent. The net proceeds of the offering are expected to be used for vessel acquisitions, working capital and other general corporate purposes. The prior market cap before the effects of the offering is about $390 million, and the gross proceeds were about $235 million in the offering.
Sun Communities Inc. (NYSE: SUI) sold 5 million shares in an upsized offering at $45.25 per share. Net proceeds are for general corporate purposes, and the stock is down 0.85% at $45.29 against a 52-week range of $36.15 to $47.84.
WageWorks Inc. (NYSE: WAGE) sold 5.631 million shares at $24.00 per share, versus a $24.07 close. While shares are actually up on the day, we would point out that selling stockholders were selling 5,131,115 shares in the offering. This company has performed very well since its IPO, with its stock having risen more than 100%.
Yandex N.V. (NASDAQ: YNDX) is called the “Google of Russia” by traders, and its ADRs took a big hit on Tuesday ahead of the offering, from $25 down to almost $23.00. The company’s selling shareholders (BC&B Holdings B.V., Belka Holdings Limited, Ilya Segalovich and Emerald Trust) sold 24,253,987 Class A shares at a price to the public of $22.75 per share. None of the shares were sold by Yandex, and the company will not receive any proceeds from the offering. The saving grace here is that shares have bounced almost 4% to $23.92, against a 52-week range of $16.65 to $28.14.
Be advised that these are not quite all the offerings, when you include some fresh filings and what are some offerings too small to matter. The total offerings come to about $1.67 billion that the market has to pony up cash for instead of buying existing shares. About $550 million was the Yandex offering alone, but seven of these 10 offerings were $100 million or more in gross proceeds raised.