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Investing.com -- Kratos Defense & Security Solutions (NASDAQ:KTOS) stock tumbled 6.7% after the defense technology company announced plans to offer $500 million of common stock in an underwritten offering.
The San Diego-based company said underwriters will have a 30-day option to purchase up to an additional $75 million of shares. Kratos intends to use the proceeds to fund investments and capital expenditures related to national security programs, finance strategic acquisitions, and for general corporate purposes including debt reduction.
Baird, RBC Capital Markets, Truist Securities, and Raymond (NSE:RYMD) James are acting as joint book-running managers for the offering, which is subject to market and other conditions.
The share offering comes as Kratos looks to scale its operations to execute on large, mission-critical national security priorities linked to existing programs, recent awards, and pipeline opportunities. The company specializes in unmanned systems, satellite communications, microwave electronics, and other defense technologies.
Stock offerings typically cause share prices to fall as they signal potential dilution of existing shareholders’ stakes. Kratos made the announcement through an SEC filing under its effective shelf registration statement.
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