Out Fox The $treet

With Novavax (NVAX) , the company is always a few days away from issuing more stock and usually at not very opportune times. The small biotech just made such a move again. On December 31, Novavax filed to sell $100 million of shares at a 2% commission. As usual, the move made no sense with a cash balance that has to be in excess of $100 million and knowledge that the company was about to release positive Phase 2 data on NanoFlu.

Acacia Comm (ACIA) is down a substantial 12% to below $80 for the first time in months. This move comes ironically after the company rushed out a secondary offering at $100 to allow insiders to dump shares. Per Benzinga , the stock is down as top customers ZTE and ADVA Optical Networking issued soft guidance. ZTE reportedly accounts for 40% of revenues and the weak revenue numbers isn't a good sign for Acacia.

Twilio proposed a secondary offering of $400 million led primarily by selling shareholders. The valuation of the company is now $6 billion based on the fully diluted share count while revenue expectations are only $255 million. Investors should not buy from insiders dumping shares at inflated valuations. After the close on a Friday, Twilio (NYSE: TWLO ) snuck out a  proposed secondary  despite only completing an IPO about four months ago. The communications software provider has seen the stock rocket since going public. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Ensco completed a surprise secondary, sending the stock down sharply. The offshore driller continues to easily surpass estimates due to strong operations during the severe downturn. The company has improved the balance sheet after completing a below-market debt offering making the stock trading far below book value appealing to new investors. In an interesting move,  Ensco (NYSE: ESV )  placed a secondary offering to raise cash to cover corporate needs during this downturn in offshore drilling. The offering is somewhat peculiar considering analysts forecast the company remaining profitable even in 2017, but the news follows a similar amount spent to repurchase debt at a large discount. Read the full article at Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Fitbit prices the secondary offering at a substantially lower price. Fossil buys competition Misfit for a relatively small valuation. The founders of the sector companies are all dumping stock into weakness providing a clear warning sign on valuations. After a strong Q3 and promising guidance for the important shopping season, Fitbit (NYSE: FIT ) dropped a bomb on the market with a proposed large secondary offering. Not surprising, the stock plunged during a weak stock market heading into the offering. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Fitbit registered a secondary offering of nearly 10% of the outstanding shares. The strong Q4 guidance apparently wasn't enough to entice insiders to delay share sales. Without a major balance sheet need, Fitbit is cashing in on what the company sees as an inflated stock price. After the market close, Fitbit (NYSE: FIT ) surprised the market with the revelation of an extremely large secondary offering. The fitness device maker produced exceptional Q3 results and has a solid balance sheet, raising questions on the reason for dumping so many shares by the company and selling shareholders. Read the full article on Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Shake Shack files an updated S1 allowing pre-IPO shareholders to dump up to 26.1 million shares. Even at the recent lows, the stock remains incredibly expensive. Shake Shack faces too much selling pressure to recommend anybody it under this scenario of likely relentless insider sells. Prior to the open on Thursday, Shake Shack (NYSE: SHAK ) filed a S1 allowing pre-IPO insiders to dump up to 26.1 million shares. The filing allows insiders to sell the shares from time to time at what amounts to over $1.2 billion at current stock prices of $47. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details

Summary Habit Restaurants surprises analysts with strong comps. The company filed for selling shareholders to unload roughly 22% of outstanding shares. The combination of the news provides an ideal time to buy a premier restaurant concept. After the close on Tuesday, Habit Restaurants (NASDAQ: HABT ) released a couple of items that make investing in recent IPO stocks very unpredictable. Smashing conservative guidance while at the same time launching a secondary offering will likely leave the stock spinning in place for some time . The fast casual burger joint has traded mostly flat after the initial IPO hype wore off and investors question the valuation. Read the full article at Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Summary Apollo Global Management files to sell remaining Sprouts shares. The investor management has regularly sold shares since the IPO. Sprouts isn't a cheap stock, but this recent dip is likely the best opportunity to buy the stock now. For investors interested in the long-term story at Sprouts Farmers Market (NASDAQ: SFM ) , the after market news on March 4 was a long-awaited event. The stock of the organic grocer was repeatedly hit over the last couple of years after leading shareholder Apollo Global Management (NYSE: APO ) dumped pre-IPO shares. At the time of the IPO, the investment manager had made it known that it planned to unload shares in theory placing a lid on the stock. Read the full article at Seeking Alpha. Disclaimer: No position mentioned. Please review the disclosure page for more details. 

After large gains following a successful IPO, it is typical for the company to do a follow-on offering allowing for pre-IPO shareholders to cash out. While this may appear to be the insiders cashing out at the top, the reality is that the top stocks doing these secondary offerings tend to move even higher. Recent hot stock Rocket Fuel ( NASDAQ: FUEL     ) announced plans to sell at least 5 million shares following the release of preliminary fourth-quarter 2013 earnings. The company provides a leading programmable advertising solution based on artificial intelligence, or AI. Read the full article here . Disclosure: Long FUEL. Please review the disclaimer page for more details. 

After large gains following successful IPOs, it is common for a company to do a follow-on offering, allowing for pre-IPO shareholders to cash out. Recent history in hot Internet follow-on offerings have signaled a top in the stock, at least temporarily. While most would debate if the IPO was really successful, currently hot Facebook ( NASDAQ: FB     ) announced plans to sell 70 million shares by the company and its shareholders. The leading social media firm follows other hot social media stocks, including LinkedIn ( NYSE: LNKD     ) and Yelp ( NYSE: YELP     ) that had similar offerings. Those stocks have underperformed the markets in the months following the related offerings. Read the full article here . Disclosure: Short FB. Please review the disclaimer page for more details. 

Last week,  Halcon Resources (NASDAQ: RAM ) announced a secondary offering of up to 43.7 million shares that caused the stock to crash. The stock traded at $6 for a few days prior to offering announcement, though typical of any “surprise” secondary, the plunge provides an opportunity to scoop up shares of a good company. The company is a growing oil exploration and production firm heavily indebted from an asset more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

In a world of constantly changing financial data and press releases, investors need to be able to interpret the differences between two seemingly similar announcements. Over the last couple of weeks, two hot technology companies announced public offerings with completely different implications to shareholders. First, 3D Systems (DDD) announced a $100M secondary on June 12th with proceeds to be used by the company to finance acquisitions and working capital. Second, Splunk (SPLK) announced a $300M secondary on June 27th where existing shareholders are selling shares with no proceeds going to the firm. The benefit to shareholders is the increase to the public float. Notice that both scenarios involve insiders of the company with major shareholders or management concluding that the stock is an attractively priced currency to utilize. One wants to utilize the cash to grow the business while the other wants to cash out and exit the business. Read the full article at Seeking Alpha. Di...

Today's news on the closing of the secondary and the exercise of over-allotments shouldn't be that big of a deal, but the stock is down 5.5% now. Hard to tell the reason for the selloff other than maybe the over-allotment was partially exercised. This is possibly seen as a negative in the market though I don't see this move as surprising. The secondary was for $9 and the stock is selling below those levels. Why take that deal when the open market is cheaper? OCZ Tech (OCZ) remains a leading provider of high-performance solid state drives (SSDs) for computing devices and systems that remains in very high demand. The company will presumably use these funds to land a very large customer though the company has yet to verify or deny. That might also be the cause of the selloff. Traders might be fleeing the stock considering the secondary has been closed and the speculated major deal has not been announced. Sure appears like a buy the dip scenario though our models are ...