Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of prepaid card issuer Green Dot
So what: Back in July, Green Dot hit the public markets with its initial public offering. Normally, when a company goes public, it sells newly issued shares to the public so that the company has a pile of fresh capital to invest in the business. Sometimes insiders will also sell some of their shares. In the case of Green Dot, the IPO was entirely insiders selling, with no new capital going to the company. After yesterday's close, the company announced the pricing of a secondary stock offering, which represented another 4.3 million shares being sold by insiders. It seems pretty understandable that investors are skittish after the offering -- if insiders are in such a hurry to get to the exits, why should public-market investors rush in?
Now what: Green Dot is in the perfect business for our post-recessionary economy -- prepaid debit cards that it distributes through retailers such as Wal-Mart, Rite Aid
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