Nordic American Tankers Ltd Plunges After Selling a Boatload of Stock

Shares of Nordic American Tankers (NYSE: NAT) are sinking on Wednesday and were down 27% at 10:45 a.m. EST. The driving force behind the sell-off was the pricing of an equity offering well below its recent trading price.

Yesterday Nordic American Tankers announced plans to sell $100 million of stock in a public offering to help recapitalize the company, which has been sinking under the weight of $341.5 million in net debt after tanker rates plunged. The company priced that offering today, raising $110 million in cash due to strong demand. However, that's significant dilution for a company that now has a market value of $275 million after today's sell-off, especially since it sold those shares at $2.75 apiece, which is well below the $3.66 per share the stock had been trading at before announcing the share sale.

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Source: Fool.com