CPI Card Group Inc. (NASDAQ:PMTS) stock fell Friday after existing stockholders priced a secondary public offering at $21.50 per share, about 20% below Thursday’s closing price of $26.94.

Offering Prices At Steep Discount

CPI Card Group said stockholders affiliated with Parallel49 Equity will sell 2.34 million shares at $21.50 each.

The offering is expected to generate about $50.3 million in gross proceeds before underwriting discounts and other expenses.

The underwriters also received a 30-day option to buy up to 350,598 additional shares at the offering price, less the underwriting discount.

The transaction is expected to close on or about Sept. 14, subject to customary closing conditions.

CPI Gets No Proceeds

CPI Card Group is not selling shares in the offering. Therefore, the company will not receive any proceeds from the transaction. Instead, all proceeds will go to the selling stockholders.

The distinction is important because the secondary offering does not raise new capital for CPI Card Group.

B. Riley Securities and D.A. Davidson & Co. are serving as joint book-running managers. Lake Street Capital Markets is acting as co-manager.

CPI Card Group provides physical and digital payment technology solutions.

PMTS Price Action: CPI Card Group shares were down 16.11% at $22.60 during premarket trading on Friday, according to Benzinga Pro data.

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