NEW YORK ( TheStreet) -- Shares of Telestone Technologies (TSTC) were sitting atop the Nasdaq's percentage decliners list on Wednesday after the China-based networking equipment provider gave a steep discount in its latest capital raise.
The company announced before the opening bell that it priced an offering of 1.675 million common shares at $12 each, a level that 15% below Tuesday's closing price of $14.13. Telestone expects to complete the sale on Nov. 30. Net proceeds are estimated at $18.9 million, not including an overallotment option allowing for the potential sale of an additional 251,250 common shares, if exercised.
The stock was down 14.9% to $12.02 in recent trades. Volume of just below 3 million was more than 13 times the issue's trailing three-month daily average of around 220,000. It's been a volatile year for Telestone. Overall, the stock is down nearly 29% year-to-date, but even at current levels, it's bounced 65% since scraping a 52-week low of $7.29 on July 7.
And while the discount to the current price is significant, the shares did close at $12.02 as recently as Nov. 12. The stock soared more than 20% in the next session, however, to close at $14.80, its first finish above $14 since Aug. 10. The catalyst was a strong third-quarter report for Telestone, which said profits grew almost 200% year-over-year in the September period and that it's confident it will meet its 2010 outlook for net income of $22.9 million, or $2.17 a share, on revenue of $129.4 million."Our performance in the third quarter showed a marked acceleration in our business and is consistent with our growth expectations for the year," said Han Daqing, Telestone's chairman and CEO in a statement at the time. "Investments in sales and marketing earlier this year helped ensure our WFDS