Key takeaways
- Nasdaq shares fell in late trading Tuesday after the company announced a secondary offering.
- Borse Dubai will offer 26,956,522 shares at a price of $59 per Nasdaq common share and has provided underwriters with a 30-day option to purchase up to an additional 4,043,478 shares.
- Borse Dubai will own approximately 10.1% to 10.8% of Nasdaq's outstanding shares upon completion of the offering.
- During pullbacks, Nasdaq stock can find support around $58.50 on a multi-month trend line and the 50-day moving average.
Shares of stock exchange operator and market technology company Nasdaq (NDAQ) fell in extended trading on Tuesday after the company announced that minority shareholder Borse Dubai plans to begin a secondary offering of its shares.
Borse Dubai will offer 26,956,522 shares of Nasdaq common stock at a price of $59 per share, representing a 5.5% discount to Tuesday's closing share price of $62.46. The offering also provides the underwriters, which include Morgan Stanley (MS) and Goldman Sachs (GS), a 30-day option to purchase up to an additional 4,043,478 shares. Additionally, Borse Dubai will receive all proceeds from the offering, which is expected to close on Friday.
Upon completion of the offering, the UAE-based exchange will own approximately 10.1% to 10.8% of Nasdaq's outstanding shares, depending on the absorption of underwriters, and is expected to be the second largest shareholder of the company's shares. Additionally, Borse plans to enter into an 18-month lock-up agreement for his remaining shares and have the right to appoint a candidate to Nasdaq's board of directors, as long as his ownership remains 10% or more in the company.
Borse Dubai Chairman and CEO Essa Kazim said the secondary offering is aimed at strengthening the company's financial position. “Today's offering is being undertaken to improve the capital structure and liquidity within the Borse Dubai Group,” he said.
Nasdaq stock has continued to trend higher since the 50-day moving average crossed above the 200-day moving average to issue a golden cross buy signal in mid-December last year. The stock's recent advance came about due to rising trading volumes, indicating growing interest from market participants.
During pullbacks, investors should keep an eye on the $58.50 level, where the price may find buying support at a multi-month trend line and the 50-day moving average. Longer term, look at the December 2022 high at $69.22 as an area of ​​potential resistance on the chart.
Nasdaq shares fell 2.6% to $60.83 in after-hours trading.
The comments, opinions and analyzes expressed on Investopedia are for informational purposes only. Please read our warranty and disclaimer for more information.
As of the date of writing this article, the author does not hold any of the above securities.
