SELECT WATER SOLUTIONS INC (WTTR) experienced a significant after-hours plunge of 6.82% on Thursday. The sharp decline followed the company's announcement of a new capital raising initiative.
The company announced a $175 million public offering of its Class A common stock. Additionally, Select Water Solutions filed for a mixed shelf offering, which provides the flexibility to issue various types of securities in the future. Such offerings typically lead to share dilution, which can pressure stock prices as the market adjusts to the potential increase in shares outstanding.
According to the company, the proceeds from the offerings are intended to fund general corporate purposes, which may include infrastructure investments, potential acquisitions, or debt repayment. The market's negative reaction reflects investor concerns about earnings dilution from the newly issued shares.