Energy & Mining

CUI Global Inc. (NASDAQ:CUI) Drops After Pricing Offering

CUI Global Inc. (NASDAQ:CUI)

CUI Global Inc. (NASDAQ:CUI) traded lower after announcing the pricing of a previously announced underwritten public offering of 6.4 million shares at a price of $2.80 per share. Shares of the company fell 2.35% in Thursday’s trading session to end the day at $2.91 a share.

CUI Global Inc. (NASDAQ:CUI)

Public Offering

In addition to the pricing of 6.4 million shares, the diversified holding company has also granted underwriters a 45-day option for the purchase of an additional 964,285 shares. CUI Global expects gross proceeds of $18 million from the offering assuming underwriters don’t exercise the over-allotment option.

CUI Global Inc. (NASDAQ:CUI) plans to use net proceeds from the offering for general corporate purposes including operating expenses as well as working capital. The company also plans to use part of the funds to promote its commercially available products and advance the development of product candidates.

CUI Global Inc. (NASDAQ:CUI) free fall appears to be gaining momentum as the stock has recorded a new 52-week low. The stock has underperformed the overall industry having shed more than 50% in market value since the start of the year. The stock is currently trading in a strong downtrend after dropping to multi-year lows.

Italian Operations

Separately, distribution of CUI Global Inc. (NASDAQ:CUI)’s GasPT solution will resume in 2018 after the Italian Energy Authority resolved its tariff dispute with Socrate SpA, the national gas transmission company. The company’s wholly owned subsidiary based in the, U.K Orbital Gas Systems, had been awarded a sole source contract last year by Socrate SpA.

The contract is for the delivery of a minimum of 3, 300 GasPT units and a maximum of 7,000, for a period of between 3 and 5 years. The company subsidiary had initially received an order of 400 units from its Italian distributor.

“We look forward to resuming deliveries in early-2018; to continuing our partnership with Socrate on our largest contract to date; and to redefining the industry’s standards for fiscal monitoring of natural gas quality with our GasPT technology,” said CEO William Clough.

In addition, CUI Global Inc. (NASDAQ:CUI) is finalizing financial results for the three months ended September 30, 2017. The company expects revenues of between $21 and $22 million compared to revenues of $23.3 million reported last year. EBITDA earnings on the other end should range between $1.1 million and $1.4 million compared to $131,000 reported last year.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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