Why is Imperial Petroleum (IMPP) stock down 35% today?

  • Imperial Oil (NASDAQ:IMPP) shares fall alongside a secondary stock offering.
  • The offer costs 72,727,272 units at 55 cents each.
  • The company expects gross proceeds of $40 million from the offering.

Source: Igor Karasi / Shutterstock.com

Imperial Oil (NASDAQ:IMPP) stock takes a beating on Tuesday after announcing a secondary offering for its shares.

According to a press release from Imperial Petroleum, this secondary offering will value the shares at 55 cents. It also includes 72,727,272 units, each containing one share and one additional share warrant.

Imperial Petroleum expects to generate gross proceeds of $40 million from the offering. It plans to use these “capital expenditures”. This could include the purchase of “vessels in shipping sectors other than the commodity and crude oil sectors”. He will also use the money for general purposes.

Imperial Petroleum notes that each Class C warrant is immediately exercisable at a price of 55 cents. The warrants expire five years after their issuance and the offering is expected to close on Thursday.

Maxim Group is acting as sole bookrunner for the offering. Imperial Petroleum grants the underwriter the option to purchase an additional 10,909,090 shares or warrants within 45 days.

IMPP’s stock takes a massive hit with today’s news. It’s worth mentioning that this follows a rally yesterday on heavy trading and rising oil prices. This intense trading continues today with some 143 million shares in motion at the time of this writing. The company’s average daily trading volume is approximately 47 million shares.

The IMPP stock is down 36.5% on Tuesday afternoon.

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As of the date of publication, William White had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

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