BKD - Why Shares of Brookdale Senior Living Tumbled 33.23% on Wednesday
Brookdale Senior Living (NYSE: BKD) saw its shares drop 33.23% on Wednesday. The stock closed on Tuesday at $4.92, then opened on Wednesday $4.25. It fell to a 52-week low of $3.27 late in the afternoon before closing the day at $3.29. The company, which operates 672 senior living facilities in 41 states, has seen its shares fall 36% so far this year.
The reason for the big drop was the company announcing it was holding a public offering of 2.5 million tangible equity units to raise $125 million for operations. The stock sale is dilutive to current investors.
This may also signal deeper financial difficulties for the company, which already has a relatively high (7.76) debt-to-equity ratio. In the third quarter, Brookdale reported revenue of $775.5 million, up 18% year over year, but with a net income loss of $28.4 million, or an earnings per share (EPS) loss of $0.15, compared to net income of $174.3 million in the same period a year ago, or $0.89 in EPS.
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Why Shares of Brookdale Senior Living Tumbled 33.23% on Wednesday