The stock of Armada Hoffler Properties, Inc. (AHH) declined in the current market after the company announced in a press release about its announcement of prices for the common stock. The stock of AHH was valued at $14.79 losing more than 5.71% from the previously closed value. At the end of the last trading session, the stock of AHH closed at $15.58. The volume of the stock traded in the last trading session was around 439.24K shares.
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Reason for AHH stock decline
Armada Hoffler Properties, Inc. (AHH) today announced in a press release that they have priced an underwritten public offering of 3,500,000 shares of its common stock shares exclusive of underwriter’s discounts and commissions and offering expenses at around $51.6 million. The offering is expected to close on 11 January 2022. To purchase up to an additional 525,000 shares the Company has given the underwriters a 30-day option.
The Company intends to use the net proceeds from the offering, along with around $28.6 million of total proceedings from recent sales. They will use the proceedings to pay the cash portion of the purchase price for the previously announced acquisition of a 79% interest and an additional 11% economic interest in the property known as the Exelon Building. This is a multi-purpose use property situated in Baltimore’s Harbor Point and has 23-stories, Class A office building of around 444,000 square feet that serves as the regional headquarters for Exelon Corporation. Also, a multifamily component consisting of 103 units, 750 parking lots, and retail space of 38,500 square feet. Armada Hoffler Properties, Inc. (AHH) plans to utilize any remaining proceeds to repay outstanding debt. They also intend to use it for general corporate operations and working capital, including development, redevelopment, construction, and other obligations.
Effect on the stock
The stock of AHH dips in the market after the announcement of its capital raise. The stock went down by more than 4.7%. Seems like the investors are reluctant after the selling of shares by AHH. But the dip might be temporary, not long-lasting.
Conclusion
This could be an opportunity for the investors looking for a stock that has a long-term potential to grow. The company is planning to invest the money to carry out its operations, clearing some of its debt and buying a property.
