Why Investors Soured on Dutch Bros Stock Today
Few investors smile when their companies announce a new share issue. The concern is almost always about dilution, as the pool of stock widens and reduces the per-share numbers that are so important to the market.
That feeling was evident Thursday with coffee slinger Dutch Bros (NYSE: BROS). On news of a fresh stock flotation, the company's share price closed the day almost 5% lower. Investors would have been better served hanging on to a clutch of prominent large-cap stocks, as the S&P 500 index only dipped by 0.3% on the day.
Just after market hours on Wednesday, Dutch Bros announced that it is floating a public offering of $300 million worth of its common stock. And as is customary with such issues, the underwriters are expected to be granted an option to purchase more for their own coffers. In this case, the company will likely grant them a 30-day option to buy up to a total of $45 million worth of additional stock.
Source Fool.com
