Why Roku Stock Dropped Today
Shares of Roku (NASDAQ: ROKU) have dropped today, down by 8% as of 2:30 p.m. EDT, after the company disclosed in a regulatory filing that it has entered into an equity distribution agreement. The streaming TV specialist may raise as much as around $500 million through the deal.
Unlike a traditional secondary offering, the equity distribution agreement is a form of private placement where banks (Morgan Stanley and Citigroup, in this case) help sell shares through "at-the-market" offerings. Roku will issue up to 4 million shares, and the financial institutions will earn a commission of 2% for shares sold.
Image source: Roku.
Source Fool.com
