First Solar Sells 8.5 Million Shares, Slides Pre-Market

First Solar FSLR announced Tuesday after the close that it was selling an additional 8.5 million shares in a common stock offering. Shares slid 6.29 percent in pre-market trade on the news.

Stock Offering

First Solar sold 8.5 million shares with the option for underwriters to sell an additional 1.275 million shares as an over-allotment option. At Tuesday's closing price, the deal will raise between $444.465 million and $511.13 million.

The company plans to use the proceeds for general corporate purposes. "We intend to use the proceeds from the sale of our common stock offered hereby for general corporate purposes, which may include acquisitions of under development photovoltaic solar power system projects, investments in photovoltaic solar power system projects that will be jointly developed with strategic partners and capital expenditures or strategic investments to develop certain business units and expand in new geographies. Until we use the net proceeds as described above, we intend to invest the net proceeds in highly-rated short-term marketable securities."

No Dividends For You

First Solar reiterated its intention to not pay a dividend anytime soon. First Solar has never paid a dividend and intends to use its cash to purchase more solar cells to boost output.

"We have never paid, and it is our present intention for the foreseeable future not to pay, dividends on our common stock. In addition, our revolving credit facility imposes restrictions on our ability to declare or pay dividends. The declaration and payment of dividends is subject to the discretion of our board of directors and depends on various factors, including the continued applicability of the above-referenced restrictions under our revolving credit facility, our net income, financial condition, cash requirements, future prospects, and other factors deemed relevant by our board of directors."

Market Reaction

Shares declined over 6 percent pre-market following the offering. Shares traded at $49.00, down 6.29 percent or $3.29 from the close. On Tuesday, shares fell 7.29 percent.