AK Steel Holding Corporation (NYSE:AKS) announced that it intends to offer and sell 65,000,000 shares of its common stock. In connection with this offering, AK Holding expects to grant the underwriters a 30-day option to purchase up to an additional 9,750,000 shares of common stock.
AK Holding intends to use the net proceeds from the sale of the common stock to repay outstanding borrowings under AK Steel’s $1.5 billion asset-based revolving credit facility and for general corporate purposes. The offering is being made pursuant to an effective shelf registration statement on file with the Securities and Exchange Commission (the “SEC”).
The public offering would dilute shareholders’ investments, and as such AKS shares are currently dropping nearly 6% to $5.15 in after-hours trading. AKS has a 1-year high of $7.09 and a 1-year low of $1.64. The stock’s 50-day moving average is $4.59 and its 200-day moving average is $4.75.
On the ratings front, AKS has been the subject of a number of recent research reports. In a report released today, Cowen analyst Anthony Rizzuto reiterated a Hold rating on AKS, with a price target of $8.00, which implies an upside of 45.5% from current levels. Separately, on October 6, Credit Suisse’s Curt Woodworth maintained a Buy rating on the stock and has a price target of $8.00 as well.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Anthony Rizzuto and Curt Woodworth have a total average loss of -3.8% and -4.5% respectively. Rizzuto has a success rate of 44% and is ranked #3455 out of 4197 analysts, while Woodworth has a success rate of 43% and is ranked #3686.
The street is mostly Neutral on AKS stock. Out of 7 analysts who cover the stock, 5 suggest a Hold rating and 2 recommend to Buy the stock. The 12-month average price target assigned to the stock is $6.00, which represents a potential upside of 9% from where the stock is currently trading.
AK Steel Holding Corp. engages in the production of flat-rolled carbon, stainless and electrical steels and tubular products through its wholly-owned subsidiary, AK Steel Corp. It operates steelmaking and finishing plants and coke plants and tube manufacturing plants. The firm also produces metallurgical coal.