Here's Why Hudbay Minerals Inc. Fell as Much as 12.9% Today
Shares of base metal miner Hudbay Minerals (NYSE: HBM) dropped nearly 13% today after the company announced the sale of 24 million shares of common stock that will provide about $200 million in funding. Should the overallotment option be fully exercised, the total funding would reach $230 million.
The market is simply reacting to the large amount of dilution the deal will bring to shareholders. There are approximately 240 million shares outstanding today, which means the financing will result in dilution of at least 10%. That roughly matches the loss as of 1:24 pm EDT, or a loss of 11.3%.
Image source: Getty Images.
Source: Fool.com