Why Canadian Solar's Shares Dropped Today
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 Canadian Solar dropped 11% today after announcing a share offering.
So what: The company announced the offering of up to $50 million in shares in "at-the-market" transactions. That means the company can sell through brokers at their discretion and a timetable was not given.
Now what: This is a pretty dilutive transaction considering the fact that the company's market cap stands at $470 million right now. The company used the catchall "general corporate purposes" as how it will use the cash, but we can assume that it will probably be used to help build system developments the company is working on. That's probably good from a long-term strategic perspective but shareholders now own a slightly smaller piece of the company, which usually sends a stock lower.
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The article Why Canadian Solar's Shares Dropped Today originally appeared on Fool.com.
Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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