What happened
Shares of Southwestern Energy (SWN) slumped about 9% by 10 a.m. ET on Monday. Weighing on the natural gas stock was a big block trade by large shareholders.
So what
Southwestern Energy announced the pricing of a large block trade today. Certain of its shareholders sold nearly 64 million shares of its stock, netting them $328.2 million in the sale. The company didn't receive any of the proceeds from this sale.
Image source: Getty Images.
The natural gas producer had previously issued these shares to help fund its acquisition of Indigo Natural Resources -- a deal that closed in September. Overall, the company issued 339 million shares, valued at $1.6 billion at an average price of around $4.72 per share. With the stock recently above $5 per share before today's decline, they decided to cash in on some of the shares they received as part of that $2.7 billion transaction.
Now what
This sale likely won't be the last large one by major Southwestern Energy shareholders. The former owners of Indigo Natural Resources only sold a portion of the stock they received in the deal via today's block sale. Meanwhile, Southwestern Energy recently agreed to purchase GEP Haynesville for $1.85 billion. It expects to issue another 99 million shares worth about $525 million to close that deal. Those future shareholders could also sell off their shares if the stock rallies above $5.29 per share, the average price of the stock they received. These future sales could put additional pressure on Southwestern Energy's stock in the coming months.
