Secondary Smoke
"In the short-term, the market is a voting machine, in the long-term it is a weighing machine."- Benjamin Graham
If you've been a regular NYSE ArcaNews reader you're well aware of Graham's axiom due to the frequency that it's been cited here over the years. In light of tomorrow's 25 million share secondary, it's interesting to look at some secondary offerings from 2003 to see how the market has digested the secondary offerings a few years ago.
Below is a table that illustrates how the market has responded to secondary offerings over time. As you can see, on average, the companies that had a secondary offering have increased the value of their stock by 42%.
If you look at the charts of these companies you'll notice that there was volatility surrounding the announcement of the secondaries, however, true to Graham's words, over the long run, these secondary offerings not only didn't provide a head wind for stock growth, but interestingly enough, shareholders of these companies have been rewarded over time for their loyalty.
(source for secondary info: http://moneycentral.msn.com/content/P57153.asp)
If you've been a regular NYSE ArcaNews reader you're well aware of Graham's axiom due to the frequency that it's been cited here over the years. In light of tomorrow's 25 million share secondary, it's interesting to look at some secondary offerings from 2003 to see how the market has digested the secondary offerings a few years ago.
Below is a table that illustrates how the market has responded to secondary offerings over time. As you can see, on average, the companies that had a secondary offering have increased the value of their stock by 42%.
If you look at the charts of these companies you'll notice that there was volatility surrounding the announcement of the secondaries, however, true to Graham's words, over the long run, these secondary offerings not only didn't provide a head wind for stock growth, but interestingly enough, shareholders of these companies have been rewarded over time for their loyalty.
(source for secondary info: http://moneycentral.msn.com/content/P57153.asp)
| Company | Close Day of Sec. An. | Close on 5/2/2006 | % Δ | Link to Historical Price |
| Anteon Intlv | 29.92 | 54.62 | 83% | |
| Pain Therapeutics | 6.61 | 9.11 | 38% | |
| OGE Energy | 21.19 | 29.84 | 41% | |
| Pacific Energy Partners | 24.76 | 31.92 | 29% | |
| Intelli-Check | 9.92 | 5.38 | -46% | |
| Bell Microproducts | 6.21 | 6.44 | 4% | |
| AvalonBay Communities | 47.25 | 104.09 | 120% | |
| Regency Centers | 35.96 | 61.26 | 70% | |
|
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| AVERAGE % Δ : | 42% |
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| Source:http://moneycentral.msn.com/content/P57153.asp |
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