NEW YORK (TheStreet) -- Shares of Emerald Oil (EOX) plunged 17.74% to $1.02 in early afternoon trading Friday after the independent exploration and production company announced the pricing of its public offering of common stock.
Emerald Oil priced 24,553,571 shares of its common stock at $1.12 a share. The offering contains a 30-day option for underwriters to purchase up to an additional 3,683,036 shares.
The company expects total gross proceeds from the offering of approximately $27.5 million. Emerald Oil said it plans to use the net proceeds "for working capital and for general corporate purposes" and expects the offering to settle on February 11.
Exclusive Report:Jim Cramer’s Best Stocks for 2015
More than 9.7 million shares had changed hands as of 12:02 p.m, compared to the daily average volume of 2,452,400.
Separately, TheStreet Ratings team rates EMERALD OIL INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate EMERALD OIL INC (EOX) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EOX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 89.23%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EMERALD OIL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that EOX's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
- The gross profit margin for EMERALD OIL INC is currently very high, coming in at 74.68%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 34.22% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 51.22% to $11.07 million when compared to the same quarter last year. In addition, EMERALD OIL INC has also vastly surpassed the industry average cash flow growth rate of -2.03%.
- You can view the full analysis from the report here: EOX Ratings Report