NEW YORK (TheStreet) -- CommScope (COMM) shares are down 5.88% to $30.51 in morning trading on Thursday after the company announced the secondary offering of 20 million of its shares by The Carlyle Group with JPMorgan (JPM) acting as the sole underwriter for the offering.
JPMorgan will have the option to purchase up to 3 million additional shares from Carlyle as part of the sale.
The broadband infrastructure provider will not receive any proceeds from the offering of the shares by Carlyle and the sale is expected to end June 16.
Carlyle will continue to own over 61 million shares, approximately 32% of the company's outstanding common stock, following the closing of the offering. Carlyle will now only be allowed to designate six directors to CommScope's board as opposed to the nine members it was previously allotted.
TheStreet Ratings team rates COMMSCOPE HOLDING CO INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate COMMSCOPE HOLDING CO INC (COMM) 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 notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk."