Shares of nuclear fuel miner Uranium Energy (NYSEMKT:UEC) plunged in Monday morning trading, down 15.5% around 11:30 a.m. EDT. The drop comes after the business announced a secondary share offering that was first announced on Friday will nearly double in size.
Uranium Energy proposed on Friday to raise $8 million in cash from selling a combination of shares and warrants to permit future purchases of shares at set prices, bundled as "units." This morning, the company firmed up the details on that offering -- and enlarged it -- apparently spooking investors out of the stock.
Uranium Energy is now proposing to sell 12.5 million units at $1.20 each, each comprising one share of Uranium Energy common stock and one warrant entitling the holder to buy another share of stock for $1.80 at any time up to 24 months after the offering closes.
The total cash raised from this offering, which underwriters have already agreed to buy in full, is $15 million, and Uranium Energy says the monies raised "will be used to fund exploration and development expenditures at the Company's projects and for general corporate and working capital purposes."
CEO Amir Adnani said this morning he is "pleased with the substantial level of interest for this Offering and appreciate[s] the strong endorsement from our existing and new shareholders."
Presumably, though, he made this statement before realizing that investors would sell off the stock to a price far below $1.20, which would seem anything but a "strong endorsement."