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Ameriprise Shares Fall After $900M Stock Offer

The Associated Press

NEW YORK (AP) — Shares of Ameriprise Financial Inc. lost ground Wednesday after the financial adviser announced plans to raise $900 million through a public stock offering.

The Minneapolis-based company saw its shares shed $2.26, or 8 percent, to $26.11 in midday trading.

In announcing the offering Tuesday, Ameriprise noted proceeds will be used for general corporate purposes, including possible acquisitions.

In a note to investors, however, Sterne, Agee & Leach analyst John Nadel wrote that the news was surprising since acquisitions are typically announced before a stock offering so investors can analyze what's driving the need to raise capital.

He noted that unless it becomes clear that Ameriprise is pursuing an acquisition, investors could question the motive behind the stock offer.

The offering should dilute the earnings forecast for 2010 by 12 percent to $2.80 per share, he wrote.

For the second-quarter of the year, the dilution should be more modest at around 3 percent to 4 percent, he predicted. The analyst holds a $35 price target on the stock.