Hess Corp. (HES) Shares Fall 10% on Huge Secondary Stock Offerings

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Shares of Hess Corp. (NYSE:HES) have taken a huge hit today after the company, which currently has a float of 237.05 million shares, announced a large secondary offering. The offering which commencement of was announced today, will offer 25 million common stock shares and 10 million depositary shares, each representing a 1/20th interest in a share of its Series A Mandatory Convertible Preferred Stock.

Goldman, Sachs & Co. will act the book-running manager for the offerings, and Hess will grant their underwriters a 30-day option to purchase an additional 3.75 million common stock shares and 1.5 million depositary shares. The 25 million common stock shares will be offered at $39 each, and the company expects to raise $945.8 million and $485.3 million from the two offerings.

The stock is down 10.17% or $4.42 following the news, hitting $39.05 per share. About 20.28M shares traded hands or 223.96% up from the average. HES has declined 33.55% since July 1, 2015 and is downtrending. It has underperformed the S&P500 by 26.25%.

From a total of 10 analysts covering Hess Corp. (NYSE:HES) stock, 4 rate it a “Buy”, 0 a “Sell”, and 6 a “Hold”. This means that 40% of the ratings are positive. The highest target price is $90 while the lowest target price is $38. The mean of all analyst targets is $60.62 which is 55.24% above today’s ($39.05) stock price. Hess Corp. was the topic of 21 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. JP Morgan maintained shares on January 25 with a “Neutral” rating. Argus Research upgraded shares to a”Buy” rating and a $70 target share price in their report from an August 18. Morgan Stanley initiated HES stock in a recent report from January 12 with a “Equal-Weight” rating. Finally, Credit Agricole initiated the stock with a “Buy” rating in a report they issued on a December 15.

The institutional sentiment increased to 0.96 in Q2 2015. It’s up 0.17, from 0.79 in 2015Q2. The ratio increased, as 66 funds sold all their Hess Corp. shares they owned while 197 reduced their positions. 56 funds bought stakes while 197 increased their total positions. Institutions now own 220.77 million shares which is 10.10% more than the previous share count of 200.52 million in 2015Q2.

Astenbeck Capital Management Llc holds 7.71% of its total portfolio in Hess Corp., equating to 178,188 shares. Sound Energy Partners Inc. owns 50,000 shares representing 5.06% of their total US portfolio. Moreover, Price Michael F has 4.71% of their total portfolio invested in the company, equating to 630,000 shares. The Texas-based Mitchell Group Inc has a total of 4.57% of their portfolio invested in the stock. New Century Advisors Llc, a Maryland-based fund reported 72,500 shares owned.

Since March 5, 2015, the stock had 3 insider purchases, and 1 insider sale for a total of $7.80 million in net activity. Wilson Robert N bought 3,000 shares worth $149,290. Hess John B bought 143,900 shares worth $7.52 million. Mullin John H Iii bought 7,000 shares worth $381,439. Hill Gregory P. sold 4,300 shares worth $252,023. The insider Truelove Brian D. sold 1,000 shares worth $74,286.

Hess Corporation is an exploration and production (E&P) firm that develops, produces, purchases, transports and sells natural gas and crude oil. The company has a market cap of $12.46 billion. The Company’s production activities are located primarily in the United States, Denmark, Equatorial Guinea, the Joint Development Area of Malaysia/Thailand, Malaysia and Norway. It currently has negative earnings. The Company’s production in the United States was from offshore properties in the Gulf of Mexico and onshore properties in the Bakken oil shale play in the Williston Basin of North Dakota, the Permian Basin of Texas, and the Utica Basin of Ohio.