Boston, MA 01/21/2013 (wallstreetpr) – The stock prices of the alternative energy provider, FuelCell Energy Inc (NASDAQ:FCEL) tanked down by as much as 21%, as it disclosed the pricing of its underwritten stock offering.
Stock Offering And Details
As per the terms of the stock offering, the company will allot 22 million shares, the price of which has been set at $1.25 per share. After Fees and commission, the gross proceeds from the offering will be almost $26 million and will be $30 million if the over-allotment option is exercised in full. The company has stated its objective to allocate the net proceeds from this sale towards project development, project funding, working capital requirements and for the general corporate goals.
The company has assigned Cowen and Company as the co-lead manager and FBR Capital Markets as co-manager for the offering. Ardour Capital Investments will also be selling group member for the offering. Further, FuelCell has announced a grant of 30-day option to the underwriters, through which, they can exercise the option and purchase up to an additional 33 million shares of the common stock.
Offer Pricing Substantially Below Current Levels
The proposed stock offering will further liquidate the shareholders’ stake. In addition, it is to be mentioned that the price of the offer, that is, $1.25, is 24% below the stocks closing price of $1.64 on Thursday. As per the experts, the price is quite low, but the recent volatility of the stock supports the reasoning for such a pricing. Apart from the volatility, a weaker balance sheet and the frequent cash demand through offerings can make investors skeptical.
With this offering, the company joins the bandwagon of small-cap alternative energy providers, who often come forward to raise fresh operating capital. But, this time-around, the company might have to just do more to avoid further capital demands.
