One of today’s biggest movers in the market is ToughBuilt (NASDAQ:TBLT). At today’s peak, shares of TBLT stock more than doubled, trading on extremely heavy volume. As of the time of writing, this stock is still up more than 70% as the market continues to rebound nicely this week.
Aside from macro factors driving the whole market higher, ToughBuilt has one key company-specific catalyst investors appear to be watching. This week, the manufacturer and distributor of various tools and accessories for the construction industry announced the closing of a $6 million public offering.
ToughBuilt issued 3.16 million shares at a price of $1.90 per share. This represented a substantial premium to the average price this stock has traded at over the past week (around $1.40 per share.)
Any sort of offering at a higher valuation than where the market is currently at is likely to be viewed positively by investors. Such is certainly the case for TBLT stock, which is now trading at a premium to this offering price. In fact, this morning, TBLT stock hit $3.95 per share, more than double the public offering price.
Let’s dive into what’s driven volatility with ToughBuilt of late.
Why Is TBLT Stock So Volatile of Late?
Like many other construction-related companies, ToughBuilt hasn’t been immune to the bearish macro pressures pushing valuations down in this sector. Construction activity in a rising interest rate environment may slow. Accordingly, there are many investors who simply want nothing to do with this sector right now.
ToughBuilt saw its stock price plummet from around $3 per share on June 16 to less than $1.50 on June 17. As we reported previously, this move appears to be tied to the company’s announced public offering. Raising capital at a discount in this environment is not necessarily something investors want to see — particularly in a space that could be hit hard should we enter a recession.
That said, the turbulent mood the market has been in of late has signaled perhaps this recent dip was a massive buying opportunity. Investors are flocking to any spot in the market where they can identify value. Today, ToughBuilt is one company investors are keeping in focus as the market continues its price discovery efforts.
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On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
