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Nielsen Shareholders Are Cashing Out

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TV viewer ratings powerhouse Nielsen Holdings (NYSE: NLSN  ) announced a plan to capitalize on its strong share price Wednesday, selling at least 35 million shares of stock, or enough shares to raise as much as $1.2 billion cash. In the event underwriters exercise their overallotment options, the size of the offering could rise past 40 million shares.

Unfortunately for Nielsen, this is not a "follow-on" offering of newly issued shares, which would raise money for the company. Instead, it's a "secondary" offering -- a sale by existing large stakeholders, cashing out their stock at a profit, and contributing no money at all to the company.

Markets reacted poorly to the proposal, as Nielsen shares opened down 6.9% from their Wednesday closing price this morning. The shares have recovered somewhat in the hour since, but are still down 2.9%, at $32.74.

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Rich Smith

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

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