Solar Losers: GT Solar, Jinko Solar

(GT Solar secondary story corrected for controlling shareholder information)

NEW YORK (TheStreet) -- GT Solar(SOLR) announced on Friday morning that controlling shareholders had completed a secondary offering of 11 million shares priced at $7.39. The deal was completed on Thursday, as was a decline in share price.

GT Solar shares ended Thursday down 3% to the price of $7.39, at which the secondary was priced. Shares of the solar company slumped near 16% this week after the secondary filing was first made on Tuesday.

For GT Solar, the larger secondary offering overhang on its stock isn't done yet, though it's not a new issue of common shares from the company that always leads to share dilution.

Two venture capital investors hold a stake of roughly 77 million GT Solar shares. Back in March, the GT Solar financial backers unloaded 25 million shares of the solar equipment maker when they held more than 100 million shares, which led to a 7% decline in GT Solar shares.

>>Solar Losers: GT Solar

For GT Solar, the share overhang remains a significant issue, even after the latest controlling shareholder sale. The venture firms are far from done exiting GT Solar. Venture capital investors selling shares en masse, and at a discount to current share price, is always an issue for investors.

Analysts say it is reasonable to expect the secondary offering to be priced at a discount, maybe as much as a 10% discount, to current share price. Venture capital secondary offerings are distinct from new common shares and GT Solar gains nothing from the proceeds of these secondary deals, but they do increase the number of shares trading at a discount.