Nielsen Shareholders Are Cashing Out

TV viewer ratings powerhouse Nielsen Holdings announced a plan to capitalize on its strong share price Wednesday, selling at least 35 million shares of stock, or enough shares to raise as much as $1.2 billion cash. In the event underwriters exercise their overallotment options, the size of the offering could rise past 40 million shares.

Unfortunately for Nielsen, this is not a "follow-on" offering of newly issued shares, which would raise money for the company. Instead, it's a "secondary" offering -- a sale by existing large stakeholders, cashing out their stock at a profit, and contributing no money at all to the company.

Markets reacted poorly to the proposal, as Nielsen shares opened down 6.9% from their Wednesday closing price this morning. The shares have recovered somewhat in the hour since, but are still down 2.9%, at $32.74.

The article Nielsen Shareholders Are Cashing Out originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

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