TIS is down 5.8% as of right now because they decided to price a 1.5 million share secondary offering. This is about 17% of outstanding shares so I can maybe see why the stock took a nice dive. The money is going to add another facility in South Carolina.
I have a longstanding policy not to overreact to secondary offerings, especially not when management can account for how they want to spend the cash. Just get the operation up and going in a reasonable timeline and these things have a habit of being neutral on existing shareholders…when they aren’t actually beneficial.
It’s the finance holes you have to look out for. But these are the companies that are losing money already. A profitable company rarely issues their way to losses.
I pay management to manage my companies for me. I’m not going to sit around micromanaging their choices, trading in and out like I have an attention disorder, because of something as stupid as a secondary offering. If they want another facility so bad they’re willing to make it happen right now, what does that say about expectations of future demand for product? So let them have it.
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