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Nielsen Bulls Take Five Amid Stock Offering

NLSN revealed a sale of 30 million shares by current shareholders

by 3/21/2012 2:00:48 PM
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After the close last night, Nielsen Holdings N.V. (NLSN - 30.33) announced the pricing of its secondary stock offering, which was originally unveiled on Monday. According to NLSN, a combined 30 million shares are being sold by existing shareholders for $30.25 per share -- a fractional discount to Tuesday's close at $30.63. The company will not sell any shares and will not receive any proceeds from the offering.

So far today, NLSN has taken a nearly 1% dip on the news, weighing on its modest 3.2% rise in 2012. Currently, the stock is trading within the $30-$31 range, which has limited all but four weekly settlements since the shares began trading in late January 2011. This area of resistance appears to be firmly in place.

Chart

Taking a closer look at the sentiment backdrop, there looks to be a modest amount of negativity already priced into NLSN. Short interest jumped 38.2% during the past two reporting periods, and it now accounts for a roughly 4% of the equity's available float. At NLSN's average pace of trading, it would take over three days to buy back all of these pessimistic positions.

However, if the shares remain pinned by resistance, there could be a shift to the bearish camp among the brokerages following NLSN. Zacks is reporting that there are six "strong buys," two "buys," five tepid "holds," and a not a single "sell" in sight.

With long-term resistance looming overhead, a fresh round of downgrades, or a continuation of the recent short-selling trend, could make matters worse for the media ratings king.

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