Frequency Electronics Prices $100M Offering at $57.50, a 4.2% Discount to Market
FEIM has more than doubled off its 52-week low of $24.722 on elevated volume (2.2× avg).
Summary
Frequency Electronics priced its public offering of 1,739,131 shares at $57.50 each, representing a 4.2% discount to the last closing price of $60.04. This pricing, which will raise approximately $100 million for the company, follows an initial launch announcement and a 424B5 filing that had indicated a higher price of $70.64. The lower price and increased share count suggest weaker-than-expected demand, leading to greater dilution for existing shareholders than initially planned. The offering, expected to close on July 30, comes weeks after a $100 million mixed shelf registration and amid a record $111 million backlog but also a recent quarterly loss. Frequency Electronics expects to use the proceeds it receives to fund additional growth opportunities, though it will not receive proceeds from any shares sold by selling shareholders. The discount and upsized share count are likely to pressure the stock in the near term.
At the time of this announcement, FEIM was trading at $60.04 on NASDAQ in the Technology sector, with a market capitalization of approximately $656M. The 52-week trading range was $24.72 to $80.52. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Reuters.