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Investors weren't pleased with the news of the company's follow-on offering.
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Shares of SiTime Corporation (SITM +0.02%) tumbled today after the company announced the pricing of its follow-on public offering.
The tech stock plummeted by as much as 13% this morning and was down by 10.9% as of 11:09 a.m. EST.
SiTime said in a press release today that it will sell 3 million shares of its common stock at a price of $127 per share. The company's share price closed yesterday at $140 per share, a difference of more than 9% from the follow-on pricing.
Image source: Getty Images.
One of the company's shareholders, MegaChips Corporation, will sell 1.5 million shares of common stock and the remaining 1.5 million shares will be sold by SiTime.
The announcement of a follow-on offering can sometimes spur investors to sell their shares and it appears that SiTime investors followed that familiar pattern.
SiTime said it expects proceeds of $190.5 million from the sale of its follow-on offering shares, which will close on Feb. 22.
Even with today's significant share price drop, SiTime's stock is still up an impressive 333% over the past 12 months. It's likely that today's pullback is just a reaction to the company's follow-on offering pricing announcement. As such, the stock could stabilize once some investors' gut reaction to sell the stock has passed.