Shares of Manhattan Bridge Capital Inc. (LOAN) tumbled nearly 18% on Monday following the pricing announcement of its common stock offering, before closing at $2.53 per share. Notably, to prevent significant fall in share price, the intra-day trading was halted for some time.
Manhattan Bridge Capital had announced the pricing of a public offering comprising approximately 1.75 million shares of its common stock at $2.85 per share. The offering, subject to certain closing conditions, is expected to end on Jul 31.
Further, Manhattan Bridge Capital has granted a 45-day option to the underwriters for covering over-allotments, if any. The option includes purchase of additional 0.26 million shares of the common stock at the public offering price, including the underwriter’ discount. Aegis Capital Corp. is the sole book-running manager of the offering.
Manhattan Bridge Capital is expected to garner gross proceeds of nearly $5 million from the stock offering. The company will be utilizing the net proceeds primarily for the expansion of its loan portfolio, and for working capital as well as general corporate purposes.
Since an initial public offering in 1999, this is Manhattan Bridge Capital’s first common equity primary issuance. We believe that the capital-raising move will aid the company to lower its total debt burden to some extent. Moreover, the company’s capital ratios will improve.
Some finance stocks worth considering include Capital One Financial Corporation (COF), Ally Financial Inc. (ALLY) and Navient Corporation (NAVI). Capital One holds a Zacks Rank #2 (Buy), while Ally Financial and Navient carry a Zacks Rank #3 (Hold).
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