Ford Shares Drop After Offering (Update)

Updated from 11:58 a.m.

Ford(F) shares dropped nearly 4% Wednesday afternoon as the company priced its secondary offering.

The stock changed hands recently at $4.82, down 19 cents, on volume of 380 million shares, which reflects the new equity issuance. Average daily volume had been 73 million.

Late Tuesday, Ford sold 300 million shares at $4.75 each, infusing $1.4 billion onto its balance sheet. As is widely known, the company will use a portion of the capital to make obligatory payments into a healthcare trust for United Autoworker retirees.

The offering "is another key step in our plan to transform Ford into an exciting, viable enterprise poised to return to profitability," Ford's chief executive, Alan Mulally, said in a statement.

Near-bankrupt General Motors(GM), meanwhile, which has until June 1 to reach a deal with stakeholders to stave off insolvency, was close to breaking a buck Wednesday. Its shares touched $1 earlier in the session, but then inched higher into positive territory, changing hands in the afternoon at $1.23, up 8 cents, on heavy volume.

Automakers generally saw their shares decline further Wednesday. Daimler(DAI) stock was down 5.7%, Toyota(TM) down 5% and Honda(HMC) down 4%.

>To order reprints of this article, click here: Reprints