Green Giant (NASDAQ:GGE) stock is falling hard on Monday after the real estate development company announced a proposed public share offering.
Green Giant hasn’t yet revealed any of the finer details of the public offering for GGE stock. That includes a lack of price for the shares in the offering or how many of them will be included. What we do know is that Maxim Group LLC is serving as the only placement agent for the offering.
Investors will want to keep an eye on GGE stock as the company is likely to announce the pricing of the stock offering in the near future. That could cause an additional drop in price depending on how traders respond.
What This Means for GGE Stock
A public stock offering increases the total number of outstanding shares of GGE. Doing so also dilutes the current shareholders’ stakes in the company. That’s one of the reasons investors don’t often react well to public offering announcements.
It’s also worth mentioning that public offerings are typically priced below market value. That discount is another reason that shares of a stock often drop alongside public offering news.
GGE stock is down 41% Monday morning as some 2.5 million shares change hands. The company’s daily average trading volume is about 5.7 million shares.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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