Please ensure Javascript is enabled for purposes of website accessibility

Innovative Industrial Properties Floating 2 Million Shares of Stock in Public Offering

By Eric Volkman - Jan 23, 2020 at 7:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

At the current stock price, the issue would raise gross proceeds of nearly $160 million.

Innovative Industrial Properties (IIPR 4.94%) is going to the stock market in order to drum up some funds. The company announced Thursday afternoon that it is floating an issue of 2 million shares of its common stock in a public offering.

Additionally, it will grant the issue's underwriters a 30-day option to buy up to 300,000 shares on top of the 2 million offered to the public. 

Hands in surgical gloves holding cannabis plants.

Image source: Getty Images.

Innovative has not yet set a specific price or price range for the shares. The stock's most recent closing price was $79.45; at that level, the issue would raise gross proceeds of $158.9 million. It also has not set a date for this flotation, although the current prospectus -- which is marked "subject to completion" -- has a placeholder date of January 2020.

The company, a real estate investment trust (REIT) focused on properties for cannabis companies, said it will utilize its share of the proceeds to invest in real estate suitable for such businesses. It will also channel some of the funds into "general corporate purposes."

The new stock issue's book-running manager is privately held financial services company BTIG. Other members of the underwriting syndicate include Compass Point Research & Trading, and Ladenburg Thalmann Financial Services.

It's likely that Innovative's new share issue will stoke worries about stock dilution, a frequent and troubling occurrence with marijuana stocks. The company currently has roughly 13.6 million shares outstanding, meaning the 2 million coming to market will almost certainly have an effect on the stock's value.

Innovative stock closed down by nearly 3% on Thursday, and in after-hours trading had fallen another 4.2%.

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Innovative Industrial Properties Stock Quote
Innovative Industrial Properties
IIPR
$119.33 (4.94%) $5.62
Ladenburg Thalmann Financial Services Inc. Stock Quote
Ladenburg Thalmann Financial Services Inc.
LTS

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.