NEW YORK (TheStreet) -- Matador Resources (MTDR) stock is tumbling in post-market trading after announcing it has commenced an underwritten public offering of 7.5 million shares of common stock. After the bell, shares had dropped 6.4% to $24.50.
In a statement, Matador said it intends to use net proceeds to "fund a portion of its capital expenditures," including continuing operation of a fourth rig in the Permian Basin which will allow the company to operate two drilling rigs at its Eagle Ford development. The company said it will also use proceeds to fund targeted acquisitions of additional acreage in the Permian Basin and Eagle Ford shale.
RBC Capital Markets is the sole acting underwriter for the offering.
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TheStreet Ratings team rates MATADOR RESOURCES CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MATADOR RESOURCES CO (MTDR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."