Why Shares of Ares Commercial Real Estate Corp Are Falling Today
Shares of the specialty finance company and real estate investment trust (REIT) Ares Commercial Real Estate Corp (NYSE: ACRE) have fallen nearly 10% today as of 2:45 p.m. EDT. The company earlier in the day announced the pricing on a new issuance of common stock.
Ares priced 6.5 million shares of common stock for total gross proceeds of roughly $102.8 million, with the offering expected to close around June 22. Ares also granted the underwriters the option to purchase 975,000 more shares for 30 days.
It is common for companies raising equity to see their share prices decline on the announcement because by offering more equity to other shareholders, Ares is effectively diluting the ownership of existing stock holders.
Source Fool.com