Houston American Energy Stock Plummets 25% Following Discounted Share Offering
Houston American Energy shares cratered 25% after announcing a registered direct offering priced at a steep discount. The oil and gas producer will sell 223,762 shares at $10.60 each—nearly 50% below Tuesday's closing price of $20—raising $2.37 million from an institutional investor.
The dramatic selloff follows an unsustainable 88% single-day rally that had propelled the microcap stock to yearly gains exceeding 55%. Trading volume slumped to 673,000 shares today after yesterday's frenzy saw 18.27 million shares change hands.
Market participants punished the equity dilution despite the company's need for capital. The volatility underscores the risks in thinly traded energy stocks, where price movements often defy fundamental valuation metrics.
