When A Drop In Share Price Is A Good Thing
Last week, one of my recommended stocks, Starwood Property Trust (STWD), announced a $400 million secondary offering of common stock. The new shares will go to institutional investors and typically get priced at a discount to where the stock currently trades.
As a result, the STWD share price dropped 3.5% the day after the secondary stock sale.
Now, when a company sells more shares of its stock, the overall share price always drops. When one of the recommendations from The Dividend Hunter comes to market with a secondary offering, members send me emails asking whether the share sale is a good or bad thing for our holdings.
As with all things stock related, the answer is: it depends…
The post When a Drop in Share Price is a Good Thing originally appeared at Investors Alley.
