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Shares of Coupa Software (NASDAQ: COUP) were moving higher today after the cloud-based management specialist priced a secondary stock offering. As of 3:29 p.m. EDT, the stock was up 13.9%.
Two days after Coupa announced the follow-on offering, it said it would sell approximately 4.4 million shares at $25.25, slightly below yesterday's closing price of $25.47. Secondary offerings often push stock prices down as they have a dilutive effect, but only about 300,000 shares in the sale are from Coupa, which will have a negligible effect on investors' holdings. The rest are being sold by a group of current shareholders.
The sale is expected to close on April 18.
Image source: Getty Images.
The surge in the stock price today was a bit surprising, but may be the result of heavy demand for the follow-on offering, as trading volume today was more than 20 times its average. The stock's increase should also raise demand for the offering, as the offer price is now more than a 10% discount from the current value.
Coupa stock has traded relatively flat since its initial public offering last October, and the secondary offering comes after the customary lock-up period. Though the company is unprofitable and not expected to turn a profit anytime soon, the demand for additional shares is a promising sign for the company's future.
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