FuelCell Energy (NASDAQ:FCEL) shares declined on Wednesday after the company priced an upsized public offering of common stock, raising concerns among investors over potential dilution.
The stock fell 15% to $22.04 following the announcement that FuelCell priced an offering of 10.7 million newly issued shares at $21 per share. The offering price represented a discount to the company’s previous closing price of $25.96.
The offering was increased from the previously announced $200 million offering size and is expected to generate gross proceeds of approximately $225 million before underwriting discounts, commissions and other expenses. FuelCell Energy (NASDAQ:FCEL) also granted underwriters a 30-day option to purchase up to an additional 1.6 million shares at the offering price.
FuelCell Energy said proceeds from the offering will be used for capital expenditures related to expanding manufacturing capacity, including growth initiatives at its Torrington, Connecticut facility, as well as for working capital and general corporate purposes.
Citigroup and Barclays are acting as joint book-running managers for the offering, with Oppenheimer & Co., RBC Capital Markets and Goldman Sachs & Co. LLC also serving as joint book-running managers. Canaccord Genuity (TSX:CF, LSE:CF), B. Riley Securities, BMO Capital Markets (NYSE:BMO), Siebert Williams Shank and Tuohy Brothers are acting as co-managers.
The company expects the offering to close on or about July 9.