Towerstream agreed to sell $40 million of stock on Wednesday to certain investors at a below-market price of $4 per share, representing a discount of almost 32 percent to its closing price on Tuesday of $5.87.
As a result, Towerstream shares fell $1.91, or 32.5 percent, to $3.96 during Thursday morning trading. The company plans to use the offering's proceeds to build out its target markets and ramp up its sales force, president and chief executive Jeff Thompson told FierceWiFi.
Towerstream launched as a startup more than seven years ago to provide fixed broadband wireless services to businesses and has been steadily building momentum in the eight markets it serves by providing T1-class wireless broadband connectivity. In January, the company went public after completing an alternative public offering.
Thompson said the group of investors include institutions that have invested in Towerstream in the past. "These investors are putting $40 million where their mouth is," said Thompson. "We had proof that we could replicate our business model, and that is why we were able to get investors in our offering."
For more about Towerstream's $40-million offering:
- check out this release from the company