2023-07-17 09:53:09 ET
Opera ( NASDAQ: OPRA ) shares rose 3% in early trading on Monday as investment firm TD Cowen said last week's mixed shelf offering filed by the company is a "significant positive" for shareholders.
"For years, investor pushback with respect to Opera shares has centered on two primary concerns: concentration of ownership and limited public float," analyst Lance Vitanza wrote in an investor note. "While not definitive, Friday's filing represents progress toward addressing both concerns in a shareholder-friendly manner."
Vitanza reiterated his outperform rating and per-share price target of $23 on Opera ( OPRA ) shares.
The $300M mixed shelf offering caused Opera's ( OPRA ) shares to fall nearly 30% on Friday, but Vitanza pointed out that the filing does not represent a specific plan to sell any securities, but rather it opens a window of time for which it could raise debt or equity.
"We suspect some confusion around the filing, in particular around the number of shares vs. the number of equivalent ADSs that Opera seeks to register for resale," Vitanza added, noting it has 179.8M shares outstanding, but the equivalent number of American depository shares outstanding is 89.9M.
Vitanza said there has been a lot of investor pushback on the amount of stock effectively controlled by the company's Chairman and CEO (roughly 79%) and the limited float and lack of trading volume in the ADSs.
"To the extent Opera's ownership becomes less concentrated, and to the extent the float increases, the universe of potential institutional investors will increase, in our view, and ultimately, Opera could become eligible for inclusion in a number of equity indexes," the analyst said.
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Opera rises, Cowen says shelf offering 'significant positive' for shareholders