Yahoo Finance Why 360 Finance Stock Plunged Today
What happened
Shares of 360 Finance (NASDAQ: QFIN) fell nearly 22% on Monday, following a share-offering announcement.
So what
After the U.S. market closed on Friday, June 21, 360 Finance said that it filed a registration statement with the U.S. Securities and Exchange Commission for a follow-on public offering of 7.5 million of its American depositary shares.
Citigroup and Morgan Stanley will be assisting with the stock sale, and the underwriters have an option to purchase up to an additional 1.125 million shares.
360 Finance intends to use the proceeds from the offering "for general corporate purpose." However, the Chinese digital consumer finance company only stands to receive about 5% of the capital from the stock sale. The remaining 95% will go to selling shareholders.
Image source: Getty Images.
Now what
With the stock down more than 20% today, investors appear to be viewing the decision by large shareholders to unload a portion of their holdings as a reason to sell their stock, too. It's hard to argue with that logic, and 360 Finance's stock sale may continue to weigh on its share price in the near term.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
