Why Dutch Bros Stock Was Down 21.5% Last Month
Shares of coffee chain Dutch Bros (NYSE: BROS) dropped 21.5% in September, according to data provided by S&P Global Market Intelligence. The company sold shares during the month to pay off debt. And various analysts lowered their expectations for the stock price.
On Sept. 7, Dutch Bros announced that it was selling more than 11.5 million shares to raise $300 million. The good news is that the company only had $203 million outstanding on its debt, so the offering wipes this out completely. The bad news is that it dilutes shareholder value. And unfortunately the stock only sold for $26 per share, even though it was trading higher when the offering was announced.
Following this stock offering, Stifel analyst Chris O'Cull lowered his price target for Dutch Bros stock from $36 per share to $32 per share, according to The Fly. UBS analyst Dennis Geiger didn't cover Dutch Bros stock prior to September. But on Sept. 21, Geiger initiated coverage with a price target of only $28 per share -- even lower than O'Cull's price target.
Source Fool.com
