Why Is BW Stock Falling Premarket Today?

• The company said it intends to use the proceeds of the offering to prepay any outstanding amount under its credit agreement and then reborrow some amount under the same facility.
• Babcock & Wilcox stated that it reduced its secured debt and unsecured bonds by 87%, bringing a net debt of $42.4 million at the end of the quarter.
• The company noted that B. Riley Securities is serving as the lead book-running manager for the offering, with Craig-Hallum and Lake Street Capital Markets as joint book-running managers, and Northland Capital Markets as co-manager.

Shares of Babcock & Wilcox Enterprises, Inc (BW) sank more than 10% premarket on Friday after the company priced a $200 million common stock offering to fund AI data center power generation projects, BrightLoop technology commercialization, and any future acquisitions.

This comes just days after the company reported stronger-than-expected quarterly revenue and highlighted growing demand tied to AI data center power infrastructure.

The offering priced 10,810,811 shares at $18.50 per share, for gross proceeds of approximately $200 million before underwriting discounts. Underwriters have a 30-day option to purchase up to an additional 15% of shares sold. The offering is expected to close on May 18, 2026.

The selloff appeared to be driven by potential dilution concerns after the offering was priced below Thursday’s closing price. 

How BW Plans To Use The Proceeds 

The company said it intends to use the proceeds of the offering to prepay any outstanding amount under its credit agreement and then reborrow some amount under the same facility.  

Babcock & Wilcox also stated that it will use the reborrowed amount to fund projects and working capital requirements to maintain stable turbine and boiler production capacity.

The firm also said that the proceeds from the offering will also help its AI data center power generation projects, BrightLoop technology commercialization and any future acquisitions.  

The company stated that B. Riley Securities is serving as the lead book-running manager for the offering, Craig-Hallum and Lake Street Capital Markets are acting as joint book-running managers, while Northland Capital Markets is serving as co-manager.

Babcock & Wilcox First Quarter Earnings

Earlier this week, the firm reported a strong first-quarter earnings report. The revenue for the quarter came in at $214.4 million, beating Wall Street expectations of $149.72 million; however, the GAAP loss widened to $0.62 per share from the loss of $0.19 per share a year ago,  though the company noted that most of the quarterly net loss stemmed from non-cash warrant and stock-related valuation charges. Apart from these items, adjusted net income from continuing operations during the quarter was $2.2 million.

"Innovative, strategic collaborations, such as our recent engagement with Base Electron, alongside the increasing power demands of AI data centers, has set the course for future growth at B&W," said Kenneth Young, Chairman and Chief Executive Officer at Babcock & Wilcox.

Babcock & Wilcox also stated that it reduced its secured debt and unsecured bonds by 87%, bringing a net debt of $42.4 million at the end of the quarter.

The common stock offering, announced within a week of the quarterly report, will use proceeds to reduce the company's debt and fund projects related to AI data center power generation and technology commercialization.

Post earnings, Northland raised the price target of Babcock & Wilcox stock to $23 from $17 and kept an ‘Outperform’ rating. The firm added that it sees the company to be well positioned for significant continued growth.

What Does Retail Think Of BW?

On Stocktwits, retail sentiment surrounding the stock has remained ‘bullish’ amid ‘extremely high’ message volumes in the past 24 hours.

The retail chatter on Stocktwits surrounding the company has shot up more than 400% in the past week.

One user on Stocktwits said, “it is reasonable for the market to balance today's price with the expected offering price, somewhere around $19.35, before looking ahead”

Shares of Babcock & Wilcox have declined more than 11% so far this year.

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