Shares of shipping company Navios Maritime Partners L.P. (NYSE: NMM) fell as much as 11.2% in trading Wednesday after the company announced a large share offering. At 1:55 p.m. EST, shares were still down 9.4% on the day.
Navios announced a sale of 18.4 million shares of stock for $1.90 per share. The deal will raise a total of $35 million, $33.3 million of which the company will see after fees and other expenses.
Management said the money will be used for general working capital purposes, including vessel acquisitions. That's a catch-all that doesn't tell investors much about why the company needs the cash.
Investos aren't particularly happy with the dilution of Navios Maritime's shares, particularly without knowing what the cash will be used for. It's possible the company will find a growth acquisition, but considering the fact that Navios lost money over the past year, it would be better to get current operations in the black before buying more vessels. The uncertainty around strategy will keep me from buying the discount in Navios's shares today.
10 stocks we like better than Navios Maritime PartnersWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Navios Maritime Partners wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of February 5, 2018