NEW YORK ( TheStreet) - Shares of niche U.S. solar company Ascent Solar (ASTI - Get Report) descended in Wednesday's after-market session after the company announced plans for a secondary offering of shares.
Ascent's decision to pursue a dilutive secondary shouldn't be a surprise to investors. The niche solar company's need for cash has always been an issue, and management has spoken openly about a secondary being an option that might be tapped. A shelf registration has been on file with the Securities and Exchange Commission.
Ascent shares dropped by 10%, or 44 cents, in the after-hours session on Wednesday.
Ascent intends to use the proceeds to complete production of its Fab2 solar plant.Wedbush Securities analyst Christine Hersey noted in her recent Ascent Solar third quarter earnings wrap that the company could need to raise additional capital to complete the 30 MW ramp. "While we believe the company is making progress toward reaching full scale commercialization, we recommend investors wait for the company to reach additional manufacturing and sales milestones given the significant execution risk facing the company," the Wedbush analyst wrote. Ascent Solar has 75% of its Fab2 equipment in place. Ascent Solar is the second solar company to announce a dilutive secondary this week, following Chinese solar stock Solarfun Power. -- Written by Eric Rosenbaum from New York.