Cyberark Software Ltd (NASDAQ:CYBR)’s Secondary Offering Did Not Bode Well With Investors

Cyberark Software Ltd (NASDAQ:CYBR) has run into a sharp negative territory after announcing its second offering. The company priced the secondary offering of 4,000,000 ordinary shares at $51 per share. The offering gives underwriters an option to purchase an additional 600,000 ordinary shares at the offered price within 30-day of the offering.

Volume Price Trend Indicator (VPT) of CYBR.

Priced below the closing price

The company informed that its shareholders are the sellers in the offering. Moreover, Cyberark Software Ltd (NASDAQ:CYBR) will not receive any proceeds from the sale of its shares, which is expected to conclude on March 17. 2015. The secondary offering is largely announced to relieve the selling pressure on the company’s stock ahead of its March 23 lockup expiration. However, the market is upset with the pricing of the offer, which was 8% below the closing price of Cyberark Software Ltd (NASDAQ:CYBR) stock a day earlier. The offering comprises more than 11% of the company’s outstanding shares.

Cyber security space took hit

Goldman, Sachs & Co. and Deutsche Bank Securities Inc. are engaged by the company as joint book-running managers as well as representatives. At the same time, BofA Merrill Lynch and Barclays Capital Inc. have been roped as book-running managers. In the case of assumption, that the overallotment option is not utilized then the stake of Jerusalem Venture Partners will come down from 36.6% to 30.3% through the offering. Meanwhile, the share of Goldman and Vertex Venture Capital too will fall to 15.8% and 7.1% from 18.8% and 9.1% respectively, as per the prospectus.

Apart from this Cyberark Software Ltd (NASDAQ:CYBR), which is a $1.7 billion market cap company is a renowned player in the cyber security space. The company had recently taken a hit from a market selloff. However, the stock recovered to an extent after FBN expressed its bullishness on the sector. The shares of Cyberark Software Ltd (NASDAQ:CYBR) tanked by nearly 7% to $51.72.

About the Author

Cooper is a graduated from Buffalo State College in New York with a bachelor's degree in Broadcast Journalism.

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