The Azek Company (NYSE: AZEK) closed its share offering on Tuesday for 25 million shares and an additional 3.75 million shares exercised by underwriters. The price of the offering was at $33.25 a share, but the proceeds go to large shareholders in the company that are looking to cash out. The breadth sellers involved, and size of the offering makes you wonder whether insiders are anticipating a lot more downside.
The Azek began trading on the secondary market on June 12 and rand from its post-IPO opening price of $27.50 to as high as $42.16 on August 19. Since that high, the company has formed a double top price pattern and closed at $33.07 on Thursday.
The company is engaged in the building products and equipment industry for residential, commercial and industrial markets in the U.S. The company was founded in 2013 and is based in Chicago, IL.
On September 10, the company announced an offering of up to 28.75 million shares, which included an option to purchase 3.75 million shares at a price of $33.75. That offering closed on September 15 as management and large investors sold nearly $1 billion of their shares in the offering. The sale represents nearly 18% of the company’s market cap.
Action to Take: With the price breaking its recent support near $33.70 on Thursday, the near-term target is $30 with potential of returning to its post-IPO price in the coming weeks.