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Author Topic: SSTK to sell 3M more shares.  (Read 11729 times)

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« Reply #1 on: September 16, 2013, 17:13 »
0
Not at all surprised

Snip

2 million shares will be sold by certain existing stockholders and 1 million shares will be sold by Shutterstock.  In addition, both Shutterstock (SSTK) and the existing stockholders have granted to the underwriters an option to purchase up to 450,000 additional shares of common stock. 

Shutterstock will not receive any of the proceeds from the sale of the shares sold by the selling stockholders.
« Last Edit: September 16, 2013, 17:28 by gbalex »

« Reply #2 on: September 17, 2013, 11:27 »
0
what does it means actually? in layman term..

is it shutterstock issue more shares to the market? it is usually a sign as they want more cash?

jbarber873

« Reply #3 on: September 17, 2013, 18:32 »
+3
what does it means actually? in layman term..

is it shutterstock issue more shares to the market? it is usually a sign as they want more cash?

By issuing more shares, they are diluting the value of the existing shareholders, but not by a whole lot, since they have 33 million shares outstanding. 1 million more are new shares, and 2 million are from "certain existing shareholders", which usually means shareholders from when they were private that have reached the lockup period.
Why do this? Most likely, this is the best time and method to capitalize on the big run up from the IPO. This gives them a war chest to jump on oppourtunities that may arise without having to borrow money, and proves to potential investors that they have the market power to raise capital.
 What oppourtunities? Well, say that there was a once high flying competitor that needed to be put out of it's misery- some poorly managed hapless bunch of clowns that can't get it right, and are on an unsustainable path. And they were owned by a bunch of clowns that have burned through all the cash and just want out...

« Reply #4 on: September 17, 2013, 18:38 »
0
what does it means actually? in layman term..

is it shutterstock issue more shares to the market? it is usually a sign as they want more cash?

It means that they need money.

« Reply #5 on: September 17, 2013, 18:43 »
0
is this the reason the shares of stock jumped this week to over $60 a share? Seems like any news whatsoever moves the stock one way or the other.

« Reply #6 on: September 17, 2013, 19:25 »
+1
By issuing more shares, they are diluting the value of the existing shareholders, but not by a whole lot, since they have 33 million shares outstanding. 1 million more are new shares, and 2 million are from "certain existing shareholders", which usually means shareholders from when they were private that have reached the lockup period.
Why do this? Most likely, this is the best time and method to capitalize on the big run up from the IPO. This gives them a war chest to jump on oppourtunities that may arise without having to borrow money, and proves to potential investors that they have the market power to raise capital.
 What oppourtunities? Well, say that there was a once high flying competitor that needed to be put out of it's misery- some poorly managed hapless bunch of clowns that can't get it right, and are on an unsustainable path. And they were owned by a bunch of clowns that have burned through all the cash and just want out...

They're not 'issuing more shares' are they? I thought they were just transferring existing shares.

« Reply #7 on: September 17, 2013, 23:00 »
0
what does it means actually? in layman term..

is it shutterstock issue more shares to the market? it is usually a sign as they want more cash?

It means that they need money.

We have a few clues

Snip

2 million shares will be sold by certain "existing stockholders" and 1 million shares will be sold by Shutterstock.  In addition, both Shutterstock (SSTK) and the existing stockholders have granted to the underwriters an option to purchase up to 450,000 additional shares of common stock.

Shutterstock will not receive any of the proceeds from the sale of the shares sold by the selling stockholders.

Understanding the motivation behind secondary offerings is important. If a secondary offering is executed to help existing major investors reduce their positions in the stock, take a good look at who's selling out. The more of an insider the seller is, the more cause there is to wonder whether they see problems on the horizon.

There are several common reasons for secondary offerings

The company could need to raise capital in order to pay down debt, finance operations, make an acquisitions etc. With this type of secondary offering, the company in question actually issues brand new shares, increasing its existing share count.

When a secondary offering involves the issuance of new shares, the main concern for existing shareholders is dilution. With an increase in shares outstanding, the stock shares become diluted and represent less of the overall company, and a proportionately smaller share of the company's profits going forward. The one positive is the company gets to keep the cash raised from the offering, which increases its overall value.

Secondary offerings occur when the business badly needs capital, and that's most likely to happen if shares have been beaten down. Obviously, selling new stock when share prices are depressed is the worst possible timing and explains why reactions to secondary offerings can be negative.

Another common reason would be a case of getting out while the stock prices are at a peak.

In this case secondary offerings happen because major shareholders want a chance to sell out at peak prices. Stock prices often fall when founders sell shares they own personally.

Private-equity investors and other early-stage financiers can also be involved in the decision to do a secondary offering. When private equity investors are involved, secondary offerings aren't as big a cause for concern. Although the big blocks of shares cause temporary selling pressure, the offerings don't dilute existing shareholders and usually have no impact on the business.

Alarm bells should go off when corporate insiders sell out. When a founder or key executives sells shares, it can raise fears of a loss of confidence in the company going forward.

« Reply #8 on: September 20, 2013, 12:59 »
0
News from Seeking Alpha;

Shutterstock jumps on 4.6M share follow-on 1:13 PM

Shutterstock (SSTK +12.2%) shares jump after the company prices a 4.6M (600K overallotment) follow-on at $60/share.
The company is selling 1M shares, and founder and CEO Jon Oringer and Insight Venture Partners are releasing 3.6M.

SSTK price at time of publication: $67.68.


http://seekingalpha.com/symbol/sstk

« Reply #9 on: September 20, 2013, 17:43 »
0
News from Seeking Alpha;

Shutterstock jumps on 4.6M share follow-on 1:13 PM

Shutterstock (SSTK +12.2%) shares jump after the company prices a 4.6M (600K overallotment) follow-on at $60/share.
The company is selling 1M shares, and founder and CEO Jon Oringer and Insight Venture Partners are releasing 3.6M.

SSTK price at time of publication: $67.68.


http://seekingalpha.com/symbol/sstk


Oringer currently holds about 55% of Shutterstock - 18.5 million shares. Any word of how many shares he is personally cashing out.

http://www.businessinsider.com/jon-oringer-is-a-billionaire-2013-6#ixzz2fTX1wbIc

BK

« Reply #10 on: September 21, 2013, 00:35 »
0
The market didn't see this as a warning sign. SSTK closed above $70 up 16% today. And on a day the overall market was down. They certainly can't continue that trajectory, but Wall Street doesn't see this as a negative for the company.

calcaneus10

« Reply #11 on: September 21, 2013, 00:45 »
0
This is a somewhat unusual case.  Typically when more stock is issued, the stock price falls because of dilution and a reduction in earnings per share.  Given that they were issuing shares at $60, the price should have dropped to around that level, not increase to $67.  I don't really understand why they want to increase public float either.

« Reply #12 on: September 21, 2013, 09:38 »
0
When this bubble bursts - watch out.


« Reply #13 on: September 21, 2013, 10:57 »
0
Lead underwriter Jefferies is pumping the deal. Is its buy rating on the shares a conflict of interest?

Shutterstock Announces Pricing of Follow-On Offering

Snip
Morgan Stanley, Deutsche Bank and Jefferies are acting as bookrunning managers for this offering.

http://www.rfdtv.com/story/23480370/shutterstock-announces-pricing-of-follow-on-offering

Buy Shutterstock (SSTK) Despite Lockup Expiration - Jefferies

Snip April 9, 2013

Jefferies reiterated its Buy rating and raised its price target on Shutterstock (NYSE: SSTK) from $35 to $46 despite today's lockup expiration on approximately 28 million shares.

The firm said the lockup expiration impact will be minor. "By our math only ~2.9MM of these could come to market, due to standard Rule 144 provisions and blackouts, which will limit selling among the four key insiders."

Fundamentally, the firm notes its proprietary web scrapers confirm Shutterstock's library of images now exceeds 25 million, the most ever.

« Reply #14 on: September 21, 2013, 12:00 »
0
Lead underwriter Jefferies is pumping the deal. Is its buy rating on the shares a conflict of interest?


I strongly suspect that "pumping" is exactly the right word.

« Reply #15 on: September 21, 2013, 12:13 »
0

« Reply #16 on: September 21, 2013, 12:14 »
0
Lead underwriter Jefferies is pumping the deal. Is its buy rating on the shares a conflict of interest?



I strongly suspect that "pumping" is exactly the right word.


Analysts' Ratings History for Shutterstock (NYSE:SSTK)
http://www.analystratings.net/stocks/NYSE/SSTK/?RegistrationCode=ArticleClickthrough


« Reply #17 on: September 21, 2013, 13:01 »
+1
Lead underwriter Jefferies is pumping the deal. Is its buy rating on the shares a conflict of interest?


I strongly suspect that "pumping" is exactly the right word.

I strongly suspect that a major acquisition is just around the corner. SS to buy DT maybe? Any other guesses?

« Reply #18 on: September 21, 2013, 13:40 »
+1
Seems they've got over the loss of you know who.

 I don't really understand the ins and outs of this stuff - but they already have quite a bit in the bank.

« Reply #19 on: September 21, 2013, 14:02 »
+1
I strongly suspect that a major acquisition is just around the corner. SS to buy DT maybe? Any other guesses?

Well maybe. But do they need to ? Is it worth the headache of integrating with DT or Fotolia when they could probably take most of that business via competition ?

And would they not be better sitting on the cash as a war chest ? Surely in the coming microstock price war those with the deepest pockets will be able to survive longest.

Also - don't they need the money in order to start diversifying on price ? Aren't they over-exposed to microstock (and therefore a price war) whilst being almost not there at midstock etc. Other companies can probably sustain a prolonged price war on microstock because they have other revenue streams and are not public.

All that said. Well done to the shareholders for ditching a significant proportion of their stock at what must surely be close to the top of this crazy cycle.

« Reply #20 on: September 21, 2013, 15:09 »
+1
I strongly suspect that a major acquisition is just around the corner. SS to buy DT maybe? Any other guesses?

Well maybe. But do they need to ? Is it worth the headache of integrating with DT or Fotolia when they could probably take most of that business via competition ?

And would they not be better sitting on the cash as a war chest ? Surely in the coming microstock price war those with the deepest pockets will be able to survive longest.

Also - don't they need the money in order to start diversifying on price ? Aren't they over-exposed to microstock (and therefore a price war) whilst being almost not there at midstock etc. Other companies can probably sustain a prolonged price war on microstock because they have other revenue streams and are not public.

All that said. Well done to the shareholders for ditching a significant proportion of their stock at what must surely be close to the top of this crazy cycle.

I think DT have quite a loyal following of customers and, it would seem to me, have held their share of the market remarkably well in the face of the SS juggernaut. Far better than IS or FT judging by my own numbers. I didn't upload to DT for 30 months and yet their proportion of my total earnings remained relatively static. They also generate the best RPD of the 'Big 4/5' by some margin too. I think DT would be a very good buy for SS __ they already have an office in the USA so integration, to the limited degree necessary, should be relatively simple. BigStock remain as a separate business with their own staff even though they are housed in the same building as SS.

I think SS wants to acquire other agencies in order to grow quickly, have greater market share and more control of prices. They'll make more profit too which should help to keep the share price rising.

« Reply #21 on: September 21, 2013, 16:08 »
+1
I strongly suspect that a major acquisition is just around the corner. SS to buy DT maybe? Any other guesses?

Well maybe. But do they need to ? Is it worth the headache of integrating with DT or Fotolia when they could probably take most of that business via competition ?

And would they not be better sitting on the cash as a war chest ? Surely in the coming microstock price war those with the deepest pockets will be able to survive longest.

Also - don't they need the money in order to start diversifying on price ? Aren't they over-exposed to microstock (and therefore a price war) whilst being almost not there at midstock etc. Other companies can probably sustain a prolonged price war on microstock because they have other revenue streams and are not public.

All that said. Well done to the shareholders for ditching a significant proportion of their stock at what must surely be close to the top of this crazy cycle.

I think DT have quite a loyal following of customers and, it would seem to me, have held their share of the market remarkably well in the face of the SS juggernaut. Far better than IS or FT judging by my own numbers. I didn't upload to DT for 30 months and yet their proportion of my total earnings remained relatively static. They also generate the best RPD of the 'Big 4/5' by some margin too. I think DT would be a very good buy for SS __ they already have an office in the USA so integration, to the limited degree necessary, should be relatively simple. BigStock remain as a separate business with their own staff even though they are housed in the same building as SS.

I think SS wants to acquire other agencies in order to grow quickly, have greater market share and more control of prices. They'll make more profit too which should help to keep the share price rising.

God I hope not, DT outperforms SS for me.  I would hate to see my port drop like a rock when those blood suckers took the rains.

« Reply #22 on: September 21, 2013, 16:21 »
+6
@gostwyck

I respect your perspective because you always say what you mean.

But I think that SS are going to need to focus their attention on diversifying their business. They have announced Offset but have very few distribution deals in place. Nearly all agencies distribute via Getty.

SS is, more or less, only in the microstock business. From a savings and investments perspective I am nervous of SS because I believe that only being in microstock, as they seem to be, is like having all of your eggs in one basket. It seems to me that without other revenue streams they are very vulnerable to a microstock price war. Other companies have other revenue streams and do not have to deal with the public.

Surely the normal thing is to buy businesses which are in markets which you want to get into. Ie geographical regions or similar but slightly different businesses. I am nervous of the stock price because, frankly, the market is nuts currently.


BK

« Reply #23 on: September 21, 2013, 16:36 »
+2
I think an acquisition is a real possibility. But, I'm thinking it might be a Pond5 or similar in a market segment that they don't already dominate and that offers growth potential.

« Reply #24 on: September 23, 2013, 01:12 »
0
When this bubble bursts - watch out.

+1

I believe this ''game'' is pyramidal... the shares can't rise forever.... the bubble will burst and the investors will want their money.
than what ? ? ?


 

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