What happened
Quipt Home Medical (NYSE:QIPT) had a gloomy day on the stock market Tuesday. Investors weren't pleased to hear news of a fresh share issue, and signaled their displeasure by trading the stock down by nearly 12%. By contrast, the S&P 500 index moved marginally higher on the day.
So what
After market hours Monday, Quipt announced that it is selling in excess of $37 million worth of its common stock.
This will shake out in a pair of issues. The first is a bought deal, meaning that an investor or investors has agreed to purchase the entire amount. This will total just over $35 million, and the buyer is a syndicate of underwriters led by Beacon Securities and Canaccord Genuity (CCORF 1.71%). And the company has granted those underwriters a collective 30-day option to buy an additional 15% of those shares in the offering.
The second issue is a private placement totaling roughly $2 million. Quipt did not provide specific information about the purchasing party.
In its regulatory filing detailing the stock offerings, the healthcare company said that it aims to use the raised funds to retire debt, finance potential acquisitions, supply working capital, and provide monies for "general corporate purposes."
It said the offerings should close on or about next Tuesday, April 25.
Now what
At the moment, Quipt has around 35.6 million shares outstanding and a market cap of slightly under $218 million. Looking at those numbers and the ones involved in the offerings, investors are surely worried about dilution.
