NEW YORK (TheStreet) -- Shares of Alcoa (AA) fell in morning trading Tuesday after the world's third-largest aluminum producer announced a public offering of 25 million depositary shares to help fund its acquisition of Firth Rixson.
The offering could reach 28.75 million depositary shares if underwriters exercise their full overallotment option of 3.75 million shares. Each depositary share represents a one-tenth interest in a share of Alcoa's Class B Mandatory Convertible Preferred Stock, Series 1, par value $1 a share, $500 liquidation preference per share of mandatory convertible preferred stock, equivalent to $50 per depositary share.
The stock was down 0.67% to $16.28 at 10:52 a.m.
Separately, TheStreet Ratings team rates ALCOA INC as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALCOA INC (AA) a BUY. This is driven by several positive factors, 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 solid stock price performance, increase in net income, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows: