Nuance Shares Rebound After Offer Size is Cut

When last I left Nuance Communications (NUAN), the company’s shares were sliding following the announcement of a planned 15 million share stock offering, in which Nuance was going to sell 9.6 million shares, investor Warburg Pincus an additional 4.8 million shares and “certain members of management” 600,000 shares.

As I noted, this was a triple whammy for the stock: earnings dilution, selling by the company’s biggest holder, and insider sales.

Apparently, the company got the market’s message. Nuance Wednesday morning announced that it priced the deal at $17.50. More importantly, it reduced the scope of the offer: it only sold 7 million shares, less half the size of the originally planned offering. Of those, 6,773,000 are being sold by the company. Management is selling 227,000 shares. Warburg now isn’t selling any.

Kaufman Bros. analyst Barbara Coffey this morning repeated a Buy rating on the stock, asserting that the 16% sell-off following the filing of the stock offering was over done.

Nuance Wednesday is up $1.25, or 7.1%, at $18.84.