Exchange traded fund manager WisdomTree Investments (NasdaqGM: WETF) has filed for a proposed offering of common stock of up to one million new shares.
The New York-based firm reports quarterly results later this month. The stock, which recently moved from the pink sheets to list on the Nasdaq, closed at $6.34 on Monday. The shares have fallen with the overall market after hitting a high of $9.60 over the summer. Small stocks are more volatile than blue chips.
WisdomTree shares are seen as a “pure play” on the ETF business. Its market cap is about $730 million.
BofA Merrill Lynch and Morgan Stanley are acting as joint book-running managers for the offering, WisdomTree said.
The firm oversees about $11.5 billion in ETF assets.
The company has a relatively high valuation based on second-quarter earnings, while the planned offering represents less than 1% of market cap, Mutual Fund Wire reports.
Due to WisdomTree’s transparency, third-quarter net inflows are estimated at $185 million, or 5.7% annualized growth, according to Sterne Agee analysts.
“For the quarter, WisdomTree represented just under 1% of industry inflows into ETF’s, below the company’s 3-5% target. As a result of the transparency, the only real question from an earnings standpoint comes down to expense levels,” they wrote in a research note earlier this month.
They cut their one-year price target on the stock by 75 cents to $8.50. In the final week of the third quarter, WisdomTree saw outflows of about $700 million by a single large client, according to Sterne Agee.