Hortonworks shares are tanking after news of secondary stock offering

Hortonworks shares are down more than 21% Tuesday morning, after the company said that it will raise $100 million in a secondary stock offering.

Hortonworks, founded by a group of ex-Yahoo engineers, sells data processing software built on a popular framework called Hadoop.

It went public in December 2014 and has a market cap of around $600 million.

Secondary offerings are usually done to raise additional cash at the expense of the shareholders giving up more ownership. It leads to dilution of their existing ownership, and is often received negatively by the market.

Hortonworks also released fourth quarter earnings guidance that were better than street expectations last week. It expects revenue between $37 million to $38 million, while analysts are projecting $35.2 million, and EBIDTA loss in the range of $16.8 million to $17.5 million, right within the range of analyst projections of $17.4 million.

Hortonworks is one of the early pioneers in the Hadoop big data analysis space. Its competitors like Cloudera, which was last valued at roughly $5 billion, are also expected to go public soon.

Hortonworks will announce earnings on February 10.