MeetMe Inc (NASDAQ: MEET)
MeetMe is having a horrible time in the pre-market hours today, and for good reason. The company announced a secondary public offering that seems to be causing concern among investors. Today, we'll talk about that offering, how the stock is reacting in the market, and what we'll be watching for with regard to MEET ahead.
Why MEET Is Falling
Before we get into the details here, we have to give a big thank you to Trade Ideas for being the first to alert us of the movement on MeetMe. With that said, the declines on the stock seem to be caused by a secondary public offering that was priced this morning. The company announced that it would be selling a total of 8 million shares at a price of $5 per share.
This is proving to be concerning among investors. After all, when new offerings are launched, they essentially cut the pieces of the pie that investors already own into smaller pieces. Not only that, secondary offerings can be a sign of financial troubles. As a result, investors are concerned with MEET and sending the stock downward.
How The Stock Is Reacting To The News
While the market hasn't opened quite yet, we are indeed seeing a reaction among MeetMe investors, and it's not a good one. Since the announcement, the stock has been on a downward spiral in the pre-market. Currently (9:11), MEET is trading at $5.20 per share after a loss of $0.61 per share or 10.50% thus far today.
What We'll Be Watching For Ahead
Moving forward, the CNA Finance team will be watching MEET incredibly closely. Ultimately, we're interested in learning how the $40 million the company plans on raising will be spent and what the next steps toward growth are. Nonetheless, we'll continue to watch the story closely and bring you the news as it breaks!
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[Image Courtesy of Public Domain Pictures]