Hortonworks (HDP) Stock Plunging on Secondary Share Offering

NEW YORK (TheStreet) -- Shares of Hortonworks (HDP) are plummeting by 24.2% to $12.56 on heavy trading volume on Tuesday afternoon, as the company announced a secondary offering of shares for $100 million on Friday, Barron's reports.

Hortonworks is a Santa Clara, CA-based business computer software company.

The company also announced preliminary 2015 fourth quarter results above analysts' expectations. Hortonworks expects revenue of $37 million to $38 million and an EBITDA loss of $16.8 million to $17.5 million.

Analysts estimated revenue of $35.2 million and an EBITDA loss of $17.4 million, Barron's noted.

Wunderlich Securities said that investors should take the capital raise as a positive in a note this morning.

"Investors are likely to view the capital raise as a positive, which should allow the company to continue its strong/aggressive industry progression as customers migrate to the Apache/Hadoop standards/architecture," the firm said in a note cited by Barron's.

Needham & Co. said Hortonworks has to prove the new share offering is justified.

"We believe it will be incumbent on HDP during its roadshow to show why this offering, announced in this way, at this time should not be interpreted as evidence of serious difficulty," the firm said according to Barron's.

About 2.03 million of the company's shares were traded by this afternoon, well above its average of 539,830 shares per day.

HDP Chart HDP data by YCharts

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