By midafternoon, shares of the drybulk shipping company had taken off 13.1% to $6.36.
On Tuesday, the microcap announced it had commenced an underwritten offering of Class A common stock. The Athens-based company plans to offer 5.9 million shares at $6.25 a share, a 14.6% discount to Tuesday's close of $7.32 a share. Underwriters will also have a 30-day option to purchase an additional 885,000 of Class A common shares.
Net proceeds of around $34.5 million will be reinvested in new vessels and other general corporate purposes such as debt repayments.
The offering is expected to close on Feb. 18.
Jefferies acted as sole book-running manager and Maxim Group as lead manager of the offering.
TheStreet Ratings team rates PARAGON SHIPPING INC as a Sell with a ratings score of D. The team has this to say about their recommendation:
"We rate PARAGON SHIPPING INC (PRGN) a SELL. This is driven by some concerns, 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. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows: