NEW YORK (TheStreet) -- Hydrogenics (HYGS) stock is tumbling in pre-market trading after the hydrogen energy developer announced a public offering of 1.5 million common shares (1 million from treasury and 500,000 secondary shares by CommScope, a selling shareholder).
Before market open, shares had tumbled 21.9% to $15.30.
Hydrogenics priced the offering at $15 a share. The company said net proceeds are expected to total $13.7 million after deducting underwriting commissions and other expenses and will be used for general corporate purposes, including to support any negative cash flows from operating activities. Hydrogenics will receive no proceeds from the sale of shares by CommScope.
Canaccord Genuity is acting as the sole book-running manager, and Craig-Hallum Capital Group and Roth Capital Partners are acting as co-managers for the offering. The offering is expected to close around May 16.
TheStreet Ratings team rates HYDROGENICS CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HYDROGENICS CORP (HYGS) 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. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows: