Why Did Nordic American Tankers Fall Last Week?



Nordic American Tankers stock fell

In the previous part, we discussed that Nordic American Tankers (NAT) stock fell 26.1% last week. Its peers Tsakos Energy Navigation (TNP) and Frontline (FRO) fell 0.76% and 1.88%, respectively. In this part, we’ll see why Nordic American Tankers stock experienced a steep fall.

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Why did the stock fall?

Nordic American Tankers offered new equity shares below its recent trading price. It was the main reason behind the recent fall in its stock prices. The equity offering is one component of its recapitalization program. Nordic American Tankers agreed to sell 40 million shares in a public offering at a price of $2.75 per share. It’s 33% lower than the closing price of $3.67 on December 13, 2017.

Other details

  • Nordic American Tankers’ chairman and CEO and his immediate family purchased $1 million worth of shares at the new offering price.
  • Nordic American Tankers intends to use the net proceeds from the offering to repay the outstanding amount under its current credit facility, finance company growth, and for general corporate purposes.
  • On December 1, 2017, as a part of the recapitalization program, Nordic American Tankers initiated a sale-leaseback agreement for three newbuilds to be delivered in 2018.

As of December 15, 2017, Nordic American Tankers had a market capitalization of $276 million. The following are the market capitalizations for its peers:

  • Teekay Tankers (TNK) – $399 million
  • DHT Holdings (DHT) – %509 million
  • Euronav (EURN) – $1.31 billion

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