What happened
Shares of Ecovyst (ECVT 1.28%) slumped more than 10% by 10:30 a.m. ET on Friday. Weighing on the leading provider of specialty catalysts and services was the pricing of a stock offering.
So what
Ecovyst announced the pricing of its recently launched secondary offering by some of its large shareholders. They sold 8 million shares at $9.50 per share. In addition, it granted underwriters the option to purchase up to 1.2 million additional shares over the next 30 days. The company won't receive any proceeds from this offering since it's not selling any shares.
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Shareholders are selling fewer shares than they initially proposed. They intended to offer 12.5 million shares when they launched their secondary offering earlier this week. Moreover, the $9.50-per-share price is more than 25% below the stock's trading price before that initial proposal and is at a 52-week low.
Large shareholders have been steadily selling down their positions. In April, the company unveiled a similarly sized offering of 12.5 million shares. It priced that deal at $14 per share.
While insiders have been selling, Ecovyst has been focusing on transitioning to a high-growth company. The former PQ Group Holdings rebranded to Ecovyst earlier this year after selling its performance chemicals business to concentrate on its ecoservices and catalyst technologies segments, which are targeting an addressable market of more than $9 billion.
Now what
Ecovyst recently completed its first quarter under its new name and delivered strong results. The company raised its full-year guidance for sales and free cash flow, suggesting its business plan is working. However, that wasn't enough to keep large investors from selling their shares, which could continue weighing on the stock price until they finish selling.
