Body Central Secondary, Discount Outweighs Dilution (BODY)

Body Central Corp. (NASDAQ: BODY) has a secondary offering which priced at a healthy discount for those who are getting shares.  It should have come at a discount since almost the entire sale is from insiders of the company.  We originally had up to 5 million shares indicated in the sale and the actual offering came to 4,959,795 shares of common stock.  Body Central is a retailer of young women’s apparel and accessories.

The price went off at $16.50 per share versus the close of $16.87 yesterday and versus the price of $17.98 from before the secondary offering paperwork was filed after the close on January 27, 2011.  Keep in mind that it was January 10, 2011 after the close that Body Central raised its earnings and revenue guidance and shares overnight went from $15.11 to $19.24 before peaking a couple days later at $21.30.

This company just came public in October of 2010 in a 5 million share offering at $13.00 per share.  The offering priced under expectations, but the shares actually traded higher.

Piper Jaffray and Jefferies & Co. were the lead managers of the original IPO and they are both the lead managers of today’s offering.

Since its IPO, shares have traded in a range of $11.98 to $21.30.  Normally we’d say that this offering is simply enriching the original investor groups rather than helping the company.  It seems that the discounting was enough to entice buyers because the pre-market indications have shares up around $17.20 in the pre-market trading.

JON C. OGG