Hortonworks Inc (HDP) Shares Plunge on Proposed Follow-On Stock Offering


Hortonworks Inc (NASDAQ:HDP) has just announced that they have filed a registration statement proposing a secondary stock offering of common stock shares. While this news certainly has caused shareholders to become a bit bearish, sending the stock down over 22% in morning trading, the company did not announce how many shares they will be looking to sell.

In order to proceed with the offering, Hortonworks Inc (NASDAQ:HDP) has appointed RBC Capital Markets, LLC and Goldman Sachs as book-running managers. While the stock has declined, we could see a rebound once the company officially announces details of the offering as well as what they plan on doing with the funds raised.

The stock is down 22.03% or $3.65 following the news, hitting $12.92 per share. About 1.38 million shares traded hands or 155.64% up from the average. HDP has declined 36.54% since June 12, 2015 and is downtrending. It has underperformed the S&P500 by 27.67%.

From a total of 10 analysts covering Hortonworks (NASDAQ:HDP) stock, 8 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 80% of the ratings are positive. The highest target price is $36 while the lowest target price is $19. The mean of all analyst targets is $29.29 which is 126.70% above today’s ($12.92) stock price. Hortonworks was the topic of 10 analyst reports since August 6, 2015 according to the firm StockzIntelligence Inc. Drexel Hamilton initiated shares on December 15 with a “Buy” rating. Wunderlich maintained shares with a”Buy” rating and a $36.0 target share price in their report from an August 6. Goldman Sachs initiated HDP stock in a recent report from December 11 with a “Buy” rating. Finally, Oppenheimer maintained the stock with a “Outperform” rating in a report they issued on a November 5.

The institutional sentiment decreased to 1.4 in Q2 2015. It’s down 0.70, from 2.1 in 2015Q2. The ratio is negative, as 20 funds sold all their Hortonworks Inc shares they owned while 23 reduced their positions. 25 funds bought stakes while 35 increased their total positions. Institutions now own 22.79 million shares which is 48.18% more than the previous share count of 15.38 million in 2015Q2.

Contour Asset Management Llc holds 1.39% of its total portfolio in Hortonworks Inc, equating to 1.10 million shares. Cupps Capital Management Llc owns 449,015 shares representing 1.31% of their total US portfolio. Moreover, Dragoneer Investment Group Llc has 1.08% of their total portfolio invested in the company, equating to 125,000 shares. The California-based Passport Capital Llc has a total of 1.02% of their portfolio invested in the stock. Pier Capital Llc, a Connecticut-based fund reported 282,384 shares owned.

Hortonworks, Inc. is a provider and distributor of an enterprise-grade Hadoop solution called the Hortonworks Data Platform . The company has a market cap of $707.94 million. The Company’s platform integrates with data center technologies to enable data architectures and enables its clients to collect, store, process and analyze existing and new data types in a way that augments rather than replaces their existing data center infrastructure. It currently has negative earnings. It provides support subscription offerings and related professional services around the HDP, which is its open source software distribution of Apache Hadoop and associated projects.