Stock Offering Pricing

When new shares are issued, the total value of the company does not change. After all, it is still the same company. But the value of the company is now split up among more shares, so price per share should decrease.

So in theory, the price should be chosen such that the newly issues shares balance the devaluation. Depending on the number of existing and newly issued shares this may already be pretty far below the closing price. Suppose your company had 5 million shares trading at 11$ which makes them worth 55 million. Now you add 1 million at 10 and you have 6 million shares at 10$ which makes them worth 60 million. That would quite likely lead to a price drop. Secondary investors can do that math too and would not buy at 10$ if they can get the same shares the next day cheaper on the market.
So shares for secondary offerings will often be sold at a slight discount. So in the example above, issueing another million of shares would make the company worth 9.17$ per share. One surely will get buyers for shares issued at 8$ or 8.50$ in this case.