Westport Innovations Deal to Add 5.5 Million Shares
NEW YORK (
) --
Westport Innovations
(WPRT) - Get Report
is sliding in the after-market session on Thursday after announced that it will offer 5.5 million common shares in a secondary offering. On Wednesday, when Westport released its latest earnings, the natural gas vehicle engine maker said it had filed a shelf registration, but gave no information on pricing, timing or size of a secondary raise.
The 5.5 million shares that Westport said it would offer after the market closed on Wednesday represent roughly 13% of the 40 million outstanding shares of the company. There is also an over-allotment options of up to 825,000 additional shares. Pricing information was not in the prospectus, but Westport estimates a total raise between $60 million and $120 million based on its outline of uses for the cash.
Westport has been rising for the past two sessions, even though its earnings were not a driver, because President Obama mentioned natural gas trucks specifically as a way to pass more narrow energy legislation without carbon cap and trade. Westport shares were up 14% in the past two days. The natural gas vehicle stocks trade on sentiment related to the legislative outlook more than earnings or profits.
>>Clean Energy Winners & Losers: Westport Innovations, Fuel Systems
One analyst who covers the stock, Shawn Severson at ThinkEquity, said in addition to the fact that Westport didn't provide the details of the offering on Wednesday, its commentary that it needed the cash to be raised in a secondary as a means to sign strategic agreements, may have kept investors from hitting the sell button on the typical share dilution fears associated with shelf registrations.
The company explained to the analyst that potential strategic partners concerned about the strength of Westport's balance sheet wanted to see more cash. Though the analyst acknowledged that a skeptic might think it's convenient timing for a secondary when shares have received a bump and the sector outlook remains uncertain, at least in the short-term.
Nevertheless, investors who wanted out of Westport as a result of the secondary raise probably would have exited, if they were going to en masse, when it was announced on Wednesday.
It wasn't a huge dip in shares of Westport, either, but shares were down between 3% and 5% in the after-hours session, still much smaller than the 14% gains over the previous two regular trading sessions.
The ThinkEquity analyst said the 5.5 million shares being added could equate to a penny or so of earnings per quarter.
-- Written by Eric Rosenbaum from New York.
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