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 Gulfport Energy
So what: Gulfport will be offering 4 million shares, and another shareholder will offer 1 million shares at a price yet to be determined. Credit Suisse, which is handling the underwriting, will have the option to exercise 600,000 and 150,000 shares from each party, respectively, for over-allotments.
Now what: A plunging stock price is a pretty typical reaction when a share offering is announced, but it's important to keep in mind what the money will be used for. Gulfport intends to repay its revolving credit facility and fund capital expenditures to expand its business with the money. Dilution is never great for shareholders, but in this case, I think strengthening the balance sheet and growing the business should be a positive for the company.
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