This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

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.


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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
JKS $28.07 -2.90%
TSL $12.16 -1.70%
AAPL $125.85 -2.20%
FB $77.62 -1.50%
GOOG $531.81 -1.70%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs