Shares of wireless solutions company Cambium Networks ( CMBM -1.38% ) fell as much as 15.7% in trading Friday after the company announced a share offering. Shares remained sharply lower throughout the day and were down 14.1% at 12:45 p.m. EDT.
On Tuesday, Cambium's management said shareholder Vector Cambium Holdings intended to sell 2.5 million shares through an underwritten secondary offering. Underwriters would be given the option to purchase another 375,000 shares for 30 days, which is customary.
After the market closed yesterday, the company announced the pricing for the offering, which would be sold for $28 per share. Proceeds to Vector Capital would be about $70 million.
The market's reaction today is because shares were sold at a discount to yesterday's closing price of $30.13 per share. It's not unusual for shares to be sold below the market's closing price because large sellers will take a lower price to offload a large number of shares. I wouldn't look at this as a reason to change your long-term investment thesis, but note that a big owner is jumping ship right now.