Why Speed Commerce (SPDC) Stock Dropped on Tuesday

NEW YORK (TheStreet) -- Speed Commerce (SPDC) stock stumbled over Tuesday's session after closing its private offering of preferred stock. The e-commerce platform developer said it had closed the offering with institutional investors for around $10 million worth of Series C preferred stock. The company sold an aggregate of 3.33 million shares of preferred stock and five-year warrants to purchase up to 833,333 shares of common stock for $3 a share. 

"The net proceeds of the offering will be used to pay down indebtedness and for general corporate purposes," the company said in a statement. 

By market close, shares had fallen 11% to $3.15.

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Separately, TheStreet Ratings team rates SPEED COMMERCE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate SPEED COMMERCE INC (SPDC) a SELL. This is driven by multiple 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 deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

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