U.S. Markets open in 2 hrs 55 mins

NorthStar Realty shares drop on offer pricing

BOSTON (AP) -- Shares of NorthStar Realty Finance Corp. fell on Wednesday after the commercial real estate investment firm priced a public offering of its common shares at a level below the stock's prior closing price.

THE SPARK: The New York-based company on Tuesday announced an offering of 25 million shares, and the underwriters were granted a 30-day option to buy up to 3.75 million additional shares. On Wednesday, NorthStar Realty said it was pricing the offer at $6.40 per share. That was below the stock's $6.64 closing price on Tuesday.

The offering is expected to close on Dec. 17. NorthStar Realty expects to use net proceeds to make business investments, to repurchase or pay its liabilities, and for general corporate purposes. The company is structured as a real estate investment trust, and it manages assets as well as investing in commercial real estate.

THE ANALYSIS: A stock typically falls if the company announces plans to offer additional shares at a price below the stock's latest trading price.

SHARE ACTION: Shares of NorthStar Realty fell 29 cents, or 4.4 percent, to $6.35 in afternoon trading. The stock has traded in a range of $4.34 to $6.76 over the past 12 months.