Employee flexible spending account facilitator WageWorks (NYSE:WAGE) announced a plan to capitalize on its strong share price Tuesday, selling more than 3.4 million shares of common stock, or enough shares to raise as much as $138 million cash. Unfortunately for WageWorks investors, this is not a "follow-on" offering of newly issued shares, which would raise money for the company. Instead, it's a "secondary" offering -- a sale by existing large stakeholders, cashing out their stock at a profit and contributing no money at all to the company.

WageWorks shares have gained 146% over the past year, closing Tuesday at $40.51 per share. With all shares being sold in the secondary offering belonging to existing, selling stockholders, it is these stockholders who will reap all of the gains from the share price run-up.

Markets reacted poorly to the proposal, as WageWorks shares fell 1.2% in Tuesday trading. 

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