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.
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.