Why Fiverr International Stock Fell Hard Today
Shares of Fiverr International (NYSE: FVRR) fell by as much as 13.8% on Wednesday, and closed the trading session down by 13%. The freelance marketplace operator announced a new dilutive stock offering Tuesday night. In addition, the market was taking a generally dim view of high-flying growth stocks Wednesday.
Fiverr said it would be raising $700 million through a public stock offering to be underwritten and managed by three large banks. The underwriters will also be able to purchase additional shares at the original offering price within 30 days, raising the potential cash infusion to a maximum of $805 million. That would work out to roughly 2.9 million new Fiverr shares, assuming that the banks make full use of their delayed purchase options. Fiverr's current shareholders will see the value of their shares diluted by approximately 8%, which explains more than half of Wednesday's price drop.
The company was also caught in a marketwide retreat from high-growth stocks as well as a more sharply defined flight from companies that have been benefiting from the impacts of the pandemic. Americans now have access to three effective vaccines, and President Joe Biden said Wednesday that by the end of May, the U.S. will have taken delivery of enough doses to inoculate every adult in the country.
Source Fool.com
