Shares in Sinclair Broadcast Group Inc., owner of stations reaching more than a third of U.S. television households, fell in New York trading after announcing a stock offering to raise money, diluting investors’ stakes.
The stock dropped 2.9 percent to $26.69 at the close. Even with today’s decline, the shares have more than doubled this year.
Net proceeds from the offering of 14 million Class A shares will be used for “potential acquisitions” or general corporate purposes, the Hunt Valley, Maryland-based company said in a statement. Sinclair had 52.8 million Class A shares before the offering, according to data compiled by Bloomberg.
The broadcaster, led by Chief Executive Officer David Smith, has snapped up small- and mid-market broadcast stations in the past 18 months, spending $1.84 billion in five deals, according to Bloomberg Industries. The larger footprint allows Sinclair to better negotiate with pay-TV systems such as Comcast Corp. that pay fees to pick up local broadcast content.
The announcement comes after the company reported first-quarter profit that exceeded analysts’ estimates, according to data compiled by Bloomberg. Excluding some items, profit was 20 cents per share, compared with the 17 cents analysts predicted. Sales were $282.6 million, missing analysts’ average estimate of $298.5 million.