Costamare Shares Dropped: What You Need to Know
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: Containership owner Costamare (NYS: CMRE) saw its shares sink as much as 10.5% today after announcing the pricing of its public offering of shares.
So what: The company will sell 7.5 million shares at $14.10 in an offering that is expected to close on March 27. Underwriters have the option to purchase 1.125 million more shares, the customary overallotment.
Now what: The market has settled in at almost exactly the offer price, which means the offering was probably done at a reasonable price. The company is planning to use the money to purchase vessels and possibly pay down debt, so I don't see a reason for alarm except the dilution investors face. Existing shareholders may not be happy about the move today, but it provides buyers with an even better value in this high-dividend-paying stock.
Interested in more info on Costamare? Add it to your watchlist byclicking here.
At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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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