TowerStream Falls on $40M Share Offer
The Middletown, R.I.-based operator announced the $40 million common stock offering Wednesday, offering 10 million shares at $4.00 apiece. The firm's shares closed at $5.87 each yesterday but took a nosedive on the news today, closing nearly 33 percent down at $3.95.
TowerStream started trading on Nasdaq last Thursday after starting on a smaller board in January. The firm dipped 3 percent on its debut last week. (See TowerStream Dips on Nasdaq Opening.)
The market really saved its spanking for the $40 million stock offering, though. TowerStream's shares have lost roughly half their value in just less than a week, mostly due to today's fall.
TowerStream has always made it clear that it will need money -- and lots of it -- to continue growing. TowerStream says it made a net loss of $1.64 million for the three months ended March 31, compared to net income of $15,124 in the same period last year, partly due to continued expansion.
The market hasn't looked kindly on WiMax recently. Clearwire LLC (Nasdaq: CLWR) saw a similar drop on its market debut as investors realized just how much it will cost to roll out WiMax in the United States. (See Clearwire: The Big Spend.) — Dan Jones, Site Editor, Unstrung