Why Compass Diversified Holdings Stock Dropped 11% Today
Shares of Compass Diversified Holdings (NYSE: CODI) plummeted today -- down 10.9% as of 1:05 p.m. EDT -- after the private equity firm announced a series of fundraising measures that apparently spooked investors.
Compass Diversified announced yesterday that it is issuing and selling 5 million shares at $17.60 apiece, raising at least $88 million in gross proceeds, and potentially a bit more. As is usual in such offerings, Compass is giving its offering's underwriters the opportunity to buy an additional 750,000 shares. The total number of shares potentially being floated, therefore, comes to 5.75 million -- enough to dilute existing shareholders out of about 9% of their stake in the company.
Separately, this morning Compass announced plans to offer $200 million worth of "senior unsecured notes due 2026" (that is, Compass is taking on more debt).
Source Fool.com
