NEW YORK (TheStreet) -- Basic Energy Services (BAS) stock is slipping on Tuesday after announcing the commencement of a secondary public offering of 6 million shares of common stock on behalf of selling shareholder DLJ Merchant Banking Partners III and related funds.
Goldman Sachs, underwriter for the offering, will likely also be granted a 30-day greenshoe option to purchase up to 900,000 additional shares. Basic Energy will not receive any proceeds from the sale.
By midmorning, shares had dropped 5.1% to $26.34. Trading volume of 1.4 million shares had exceeded its three-month daily average.
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TheStreet Ratings team rates BASIC ENERGY SERVICES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BASIC ENERGY SERVICES INC (BAS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and generally higher debt management risk."