What happened to the Tassal share price?
Shares of Tassal Group Limited [ASX: TGR] fell over 8% today. Tassal is a salmon farmer and related product distributor. It farms its salmon in Tasmania. The stock is still up over the last year, however
Why did TGR shares drop?
Tassal went into a trading halt yesterday. It later announced it was raising $80 million dollars via an institutional placement to fund a growth strategy. The company is trying to produce more salmon to meet a growing market for its products. Tassal is looking to raise a further $20 million from its existing shareholders.
What now for Tassal Group?
The stock is down largely because the company is issuing over 17 million new shares. This means future earnings from the company will be distributed across a larger base. A fall in the price often occurs after a company announces it is raising money by issuing stock because of this reason. Medium term, Tassal is an interesting stock to see how the market prices in the growth from the company’s expansion plans and how it progresses.