Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Nordic American Tankers (NYS: NAT) were taking on water today, falling 10%, after the company announced a share offering.

So what: In a move that the company says puts it in a position for future growth, 5.5 million shares are being offered to investors. The underwriter will be selling shares "from time to time in negotiated transactions or otherwise, at market prices."

Now what: Management may be trying to spin this as a growth opportunity, but tanker companies are barely operating above cash costs right now so the company really needs the cash cushion. It has been taking out more debt to stay afloat recently, but management thought now was a good time to shore up its long-term finances further. I'm not rushing to buy this discount, because I still have questions about rates in a tanker business that has been pummeled in recent years.

Interested in more info on Nordic American Tankers? Add it to your watchlist by clicking here.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investor’s Toolbox

Improve your investing savvy with the right financial toolset.

View Course »

Income Investing

Grow your nest-egg.

View Course »

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:
eppf2

NAT REPORTED MUCH HIGHER DAY RATES RECENTLY. PRESUMBLY BECAUSE OF THE IRAN PROBLEM. THEY SAID THEY EXPECTED THEM TO GO INTO JAN. OVER $20,000 A DAY.

January 20 2012 at 12:57 PM Report abuse rate up rate down Reply