What happened

Shares of semiconductor equipment manufacturer Camtek Ltd. (NASDAQ:CAMT) slumped on Wednesday after the company updated a prospectus filed with the SEC disclosing a share offering from both the company itself and existing shareholders. As of 12:22 p.m. EDT, the stock was down about 11.2%.

So what

According to the prospectus, Camtek may offer and sell from time to time in one or more offerings ordinary shares, rights, warrants, and units with a total value of up to $50 million. In addition, existing shareholders may offer up to 6 million ordinary shares. The prospectus was originally filed on April 14.

The Camtek Falcon 520.

Image source: Camtek.

The stock has soared since the original filing date, driven by a strong first-quarter earnings report. Shares of Camtek are up 80% since May 1, including the decline today. The timing and the pricing of the offerings were not disclosed.

Two large shareholders were named as the selling shareholders. Priortech Ltd. currently owns more than 16 million shares, and could sell as many as 6 million shares, while Meitav Dash Provident Funds and Pension Ltd. owns 1.65 million shares. The company made clear that it does now know when or in what amounts the selling shareholders may offer shares for sale.

Now what

The prospect of new shares being sold by the company and millions of existing shares being sold by existing shareholders put pressure on the stock. Shares of Camtek are still well above where they traded in April, though, and whether shares will actually be sold is still undetermined. But with the stock near decade highs, it seems likely.

The stock may take another hit if a share sale is ultimately announced, especially if the offering price is lower than the current stock price.

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