SFX Debt Downgraded, Falls 23 Percent Early Tuesday
The EDM promoter's stock price nearly fell under $1.00 after an analyst put a "sell" rating on the company.
SFX shares fell 23.3 percent to $1.02 in Tuesday morning trading after a Stifel Nicolaus analyst downgraded the stock to "sell" and lowered its price target to $1 from $2. Shares had rebounded slightly to $1.08 by late morning ET.
The downgrade came after SFX's announcement on Friday chairman and CEO Robert Sillerman failed to meet a deadline to secure financing for his proposed takeover of the company. SFX says Sillerman remains interested but, given the stock's decline, wants to pay less than his bid of $5.25 per share.
The Stifel analyst doesn't expect another bid to appear soon and believes any new capital would be "dilutive," meaning existing shareholders' ownership in the company would be reduced.