Shares of Brazilian online payments processor PagSeguro Digital rebounded on Wednesday, climbing nearly 4% a day after the stock fell on news it plans to issue 11.6m new shares.
The stock rose 3.98% to close at $28.49 on the New York Stock Exchange on Wednesday.
Late Monday, the company announced its plans for a follow-on offering, and market reaction on Tuesday saw its shares fall more than 11.3% in trading.
The Brazilian payment processor mandated Goldman Sachs and Morgan Stanley to underwrite the share sale, just six months after the pair led PagSeguro’s IPO on the NYSE.
Post follow-on, the company will have 326.68m common shares. Controlling shareholder UOL will hold 156.11m of PagSeguro’s total stock, bringing the free float to 47.8% from roughly 30% to 34%.
Proceeds from a follow-on will ramp up investments in new technology, products and services, while the rest will go toward general corporate purposes, the company said in a statement.
Shearman & Sterling and Conyers Dill & Pearman are legal counsel to PagSeguro, while Davis Polk and Maples & Calder are advising the underwriters.
After going public at $21.5 apiece, PagSeguro’s stock had peaked at $39.1 in April, but sunk from $32.88 to $28.74 after announcement of the share offering.
Books were oversubscribed on the January IPO, prompting leads to price the stock above the $17.5 to $20.5 suggested range.