Selling stock can be a troublesome business, especially if current investors think that the supply will exceed the demand and thus send prices crashing. That’s what happened with web company Opera (NASDAQ:OPRA) today. So investors sold off in job lots and made that prophecy self-fulfilling, sending Opera down over 29% at one point in Friday afternoon’s trading.
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Opera currently counts over 380 million monthly active users to its credit, with some turning up for the web browser and others coming in for other services Opera offers. But Opera’s planned stock sale would be worth up to $300 million, with current shareholders eligible to offer as many as 141.7 million of those shares. Since Opera operates as an American depository share, at a 10-to-1 exchange rate, that accounts for some of the unusual numbers. Especially considering that, even after today’s drop, Opera shares are still valued around $19.63 per share.
Oddly, Opera doesn’t look to get any money out of the deal itself. At least, not for now; the $300 million sale, called a “shelf offering” would allow for sales sometime in the future. The shareholder offer looks to be a separate matter, and also appears limited to two of Opera’s primary shareholders: Keeneyes Future, which owns 7.6% of Opera, and Kunlun Tech, which owns 71.2% of Opera.
The news was effectively catastrophic for Opera. A look at the last five days of trading saw Opera actually heading upward, if only gradually. But then today’s report emerged, and share prices plunged. The plunge kept going throughout the trading day, though several small rallies did try to step in. With only a little left to go in the trading day, Opera bounced off its low for the day, but only just.
