Shares of Invesco fall after $400M stock offering
Shares of Invesco Ltd. fell today after an analyst wrote that the asset manager's public offering of $400 million in common stock could indicate its cash flow is tight.
Shares of Invesco Ltd. fell today after an analyst wrote that the asset manager’s public offering of $400 million in common stock could indicate its cash flow is tight.
Invesco stock fell 97 cents, or 6.2 percent, to $14.62 in morning trading.
On Monday, Invesco said it started a public offering to sell $400 million of its shares. The Atlanta-based firm said proceeds would be used for general corporate purposes.
In a note to investors, KBW analyst Robert Lee wrote that the offering came as a surprise and could indicate the firm’s cash flow is somewhat constrained.
Given the current environment, Lee wrote that Invesco could be looking at investing in new products. He also noted mergers and acquisitions in the industry “may be poised to heat up.”
In a separate note, however, Citi analyst Keith Walsh wrote that “we don’t view proceeds as being used toward a deal.” Walsh wrote that $400 million would likely be used to pay down debt and boost capital flexibility.
He maintained his “Hold/High Risk” rating on the firm.
Walsh also noted that CEO Marty Flanagan has “applied strict management guidelines” to cut costs while performance has improved significantly over the past several years.
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