Shares of Array Technologies (NASDAQ:ARRY) fell today after the company announced a secondary offering of 31 million shares of its stock.
The tech stock was down by 12.1% as of 11 a.m. EDT.
Array said in a press release yesterday that it will hold a secondary offering of 31 million shares of its common stock, with an option of selling an additional 4.4 million. The shares will be sold by Oaktree Capital, a current Array stockholder. Array Technologies said that it won't receive any proceeds from the sale of the shares.
Investors typically don't like secondary offerings, as some of them can dilute the value of existing shares. But when major stockholders sell their shares, as Oaktree is doing in this case, it doesn't dilute the value of existing shareholders.
Nevertheless, investors pushed Array's stock down on the news. Investors may also be following a larger pattern among tech investors who are leaving the sector for other investments.
Some investors are concerned about the potential for the Federal Reserve to eventually increase interest rates, which they believe could slow tech sector growth. The Federal Reserve will give an update about interest rates and an updated economic outlook for the U.S. later today.
While Array Technologies investors were likely responding to the company's secondary offering announcement today, investors may want to anticipate more volatility from the stock. The tech sector has been giving up some of its gains as investors look to other areas of the economy for growth. With today's drop, Array Technologies' stock is down 13% year to date.