Shares in networking equipment and software firm Juniper Networks Inc took a dive Wednesday after the company filed a registration statement with the Securities and Exchange Commission for an offering of up to 5.75 million shares of common stock. Based on Tuesday’s closing price of $205, the offering would have been worth roughly $1.18bn. But following news of the proposed offering, Juniper shares shed $24.75, or 12%, to close at $180.25 – which would value the sale at $1.04bn.
Even after the downturn, Juniper shares are still trading at more than six times the $34 initial offering price of the Mountain View, California-based company’s IPO in June. Analysts reckon the sell-off Wednesday was largely due to significant profit taking ahead of any impact the dilutive effects the offering may have on the share price going forward. There has been plenty of opportunity for such profit taking, as the shares have traded as high as $234.375 in their short time on the market.
Of the total proposed offering, 1.5 million shares will be sold by the company and 3.5 million by existing stockholders, which include Newbridge Networks Corp and Lucent Technologies Inc. The offering is being managed by Goldman Sachs & Co, Credit Suisse First Boston, BancBoston Robertson Stephens, Dain Rauscher Wessels, SG Cowen Securities and Warburg Dillon Read LLC. Following the offering, the company will have roughly 51 million shares outstanding.
