Real estate company La Rosa announces potential secondary offering

The stock price of La Rosa Holdings, which provides brokerage and related services in the real estate sector, fell nearly 4% in premarket trading on June 12. After the market closed the previous day, the company announced it might sell up to 19% of its increased share capital to investors.

Details

La Rosa’s shares, with a market capitalization of $17.1 million, dropped 3.81% in premarket trading on June 12 to $1.01 per share. The day before, the company announced it plans to offer investors 3.6 million units, each consisting of one common share and one five-year warrant. The share price is set at $1.1, the closing price on June 10, according to the company. The warrant’s price is $1.21, implying a 10% premium to the June 10 closing price.

Following the secondary offering, 18.77 million La Rosa shares will be traded on the exchange, the company noted (excluding the underwriter’s option). This means the company plans to offer investors up to 19% of the increased share capital. As of June 11, 74% of the company is owned by its founder, Joseph La Rosa.

From the offering, the company expects to raise approximately $3.24 million after deducting all fees and assuming the underwriter exercises the option. The proceeds will be used to replenish working capital and for general corporate purposes, including debt repayment.

What La Rosa does

La Rosa is a broker specializing in residential and commercial real estate. It also sells related services, such as mortgage processing and insurance, and manages properties. The company has 21 proprietary offices, 16 franchised offices, and two subsidiaries. In the first quarter of 2024, its revenue grew by 117% to $13.1 million, the company reported. La Rosa attributes its future growth to organic sales and expansion within the U.S. and internationally, as shared during the 14th annual LD Micro conference held in New York in early April.