Shares of Newport Beach-based chipmaker Conexant Systems Inc. fell Friday after the company said it is seeking approval from the Securities and Exchange Commission to sell $100 million worth of its shares.
Conexant is filing for a shelf offering, which would give the company standing approval to sell a set amount of shares whenever it wants.
It would also allow Conexant to sell warrants, or debt that converts to stock.
Its shares fell nearly 5% in midday New York trading on a recent market value of around $170 million.
Investors typically don’t like stock offerings because they add more shares to the company’s outstanding stock and dilute their value.
The company said it intends to use the money it raises from the stock sale for working capital, acquisitions and to pay down debt.
This is Conexant’s second shelf offering in the past year.
In July, the company filed an offering to sell around $20 million worth of its shares.
Conexant’s shares are up around 300% in the past 12 months and were recently trading at around $3 per share.
