Suntech Power Holdings Co. Ltd. (NYSE:STP) has priced its follow-on offering of 20 million ADSs at $12.50/ADS. The underwriters have an over-allotment option on an additional 3 million ADSs.
The company plans to spend the money, $250 million less costs, however it likes. Suntech noted that it “intends” to use the money for capital expenditures, working capital, and to redeem outstanding debt. But, company management “will retain broad discretion over the use of proceeds, and the Company may ultimately use the proceeds for different purposes that what it currently intends.” That sounds like a management team that doesn’t have a clue about what needs to be done.
After dropping about $3.00 per share in the last two days, Suntech ADSs are trading down 2.75% in the pre-market this morning, at $13.10. The 52-week trading range is $5.09-$49.60. The discounting might seem pretty deep on the surface, but this stock traded down in the $12.00 area a month ago and shares were down under $6.00 in March when the selling waves were crushing every stock under the sun.
Paul Ausick
May 22, 2009
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