Shares in UP Fintech (Nasdaq: TIGR) pulled back 8% in early trading Tuesday on the company’s announcement of a stock offering, reversing the big gains it enjoyed since late May.
The Beijing-based online brokerage firm said in a statement Monday after the markets closed that it plans on selling 6.5 million of its American depositary shares. While UP Fintech did not close pricing, based on Monday’s close of $26.79 per share, it would raise $174.14 million.
Also, the underwriters on the deal will be granted a 30-day option to purchase an additional 975,000 shares. Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, and Tiger Brokers (NZ) Ltd. are the joint bookrunners on the offering.
UP Fintech plans on using the proceeds from the offering to broaden its customer base and improve user experience. It also plans on using a portion of the funds for global expansion, it said.
Ever since posting an impressive earnings report for the first quarter, UP Fintech’s stock has jumped 49% to date. In the three months ended March, UP Fintech’s revenue surged 256% year-over-year to $81.3 million. It also turned profitable in the quarter on a net income of $21.1 million.
As of the first quarter, UP Fintech added 296,000 client accounts, which is more than triple the amount it had in the same period last year.
In addition to a strong earnings report, UP Fintech’s stock got a boost on applying for a license to facilitate cryptocurrency transactions. But now, UP Fintech is looking to cash in on the recent gains and investors are selling off ahead of dilution.
Year-to-date, shares in UP Fintech have more than tripled.