Stock Track | Kratos Defense Plunges 5.13% After-Hours on $1 Billion Stock Offering Announcement

Stock Track10:30

Kratos Defense & Security Solutions experienced a significant decline of 5.13% in after-hours trading on Thursday, following the company's announcement of a proposed public offering of common stock.

The defense technology company revealed plans to offer $1 billion worth of its common stock in an underwritten public offering. The underwriters will also have a 30-day option to purchase up to an additional $150 million of shares. All shares in the offering are to be sold by Kratos, with the proposed offering subject to market conditions.

Kratos stated it expects to use the net proceeds from the offering to finance customer and program targeted acquisitions, fund investments and capital expenditures for national security priorities, and for general corporate purposes. Such large equity offerings often lead to short-term price pressure due to concerns about shareholder dilution and increased supply of shares in the market.

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