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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Telestone Tumbles After Pricing Stock Offer

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 [wireless fiber distribution systems] were chosen as the last mile network of choice at targeted installation sites and we have seen a dramatic pickup in our installations year long."

Like many China-based companies, Telestone doesn't have a wide following on Wall Street. The only firm covering the stock is Roth Capital Partners, which is the sole bookrunner on this latest offering, which is being made under a shelf registration statement declared effective back in March.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASDAQ 4,449.5640 -22.5440 -0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs