Last May, they put out a new issue about the same size as this one in order to finance a refinery purchase. The stock price went from about $26 1/2 to about $20 3/4 over a one month period. The new issue was priced at $22 1/2. It may take a while for this to form a new bottom if it follows the pattern of last May.
For whatever reason, it is clear that investors aren't happy over this offering which management chose over other means such as increasing the debt level or cutting the dividend. I've stock in another equity which is issuing 50 million shares and the stock is going up gangbusters and the new SO is already oversubscribed even though the offering was at a 4 percent premium. Since the valuation for CLMT is now below the 31.81 offering, there must be a clear reason why folks are happy. No reason to be all panicky, right?
pricing of new offering is quite a bit higher than the current market price. Either the deal is overpriced or the shorts are having a field day trying to destroy this one on stock sale news. SEC needs to have an uptick rule but they (SEC) are too stupid (or cooperating with hedge funds) to see the crooked nature of the markets.
10% dillution and the stock was down about 6%. i view that as positive along with the announced share price of $31.81. don't think they would choose that number if they weren't confident of buyers coming to the table. i shorted the feb (30) strike puts and would be in the stock at $29.10 if put to. i'm fine with that...mw
Management waited for the stock to match its all time high for the last 12 months before doing the secondary offering. I think the stock could go to around $27 as its low point during the recovery time. I also think the secondary is priced too high for this market. Maybe a run up to the ex divvy date by the usual divvy chases might negate that.
But overall, management made out good taking the cream off the top.