Why Cinedigm Corp (CIDM) Is Down on Thursday

Updated from 9:54 a.m. EST to include details of offering. 

NEW YORK (TheStreet) -- Cinedigm Corp (CIDM) is slipping on Thursday after pricing a secondary offering of its Class A common stock.

By late morning, shares had taken off 13% to $2.75.

The digital media distributor said it intends to offer 10.2 million shares at $2.70 per share. The underwriter will have a 30-day option to purchase up to 1.53 million additional shares. 

New York-based Cinedigm plans to use the approximate $25.7 million in net proceeds for working capital, to fund potential future acquisitions and other general corporate purposes.

The offering is expected to close on March 25, pursuant to customary closing conditions.

Piper Jaffray & Co. will act as the sole book-running manager in the offering.

Cinedigm distributes its digital library of independent content to providers such as Apple  (AAPL) iTunes, Hulu, Amazon  (AMZN) and Netflix (NFLX).

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TheStreet Ratings team rates CINEDIGM CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate CINEDIGM CORP (CIDM) a SELL. This is driven by a number of negative factors, 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 deteriorating net income, weak operating cash flow and feeble growth in its earnings per share."

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