Investors had a strong negative reaction to Newcastle Investment Corp. in the wake of the real estate investment trust’s upsizing and pricing of its public offering of 35 million shares of its common stock. The offering was originally for 30 million shares.
Newcastle priced the offering on Wednesday before the market opened to raise gross proceeds of $174 million. That works out to $4.97 per share.
At first, investors bid up the stock, opening at $5.20 per share, or $0.05 higher than the previous close. At one point it got as high as $5.25 per share.
But by the end of the day, the stock sunk to $5.02, after hitting $5.
The volume of approximately 39 million shares traded was almost four times the higher than the average of 10.2 shares traded.
Proceeds are to be used for general corporate purposes, including investments in senior housing properties plus acquisitions of CDO debt, other real estate securities and loans, operating businesses and others.
In May Newcastle
