What happened Shares of ADT (NYSE: ADT) fell 13.3% on Wednesday after the security products company announced a secondary offering late on Tuesday. So what Several investment funds overseen by Apollo Global Management offered to sell 43.5 million shares of ADT common stock. The stock will be sold for $10 per share, which was lower than some investors expected, and ADT's share price fell in kind. After closing at $10.80 on Tuesday, ADT's shares fell to a closing price of $9.36 on Wednesday. ADT's stock fell sharply after pricing its secondary offering. Image source: Getty Images. So why did ADT's stock fall below its offering price? Investors were likely a bit concerned that company insiders were selling their shares at a lower-than-expected price. Apollo is ADT's largest shareholder, and several current and former ADT executives are also selling stock in the offering. Now what It's important to note that ADT is not selling any shares. It will not receive any cash from the stock offering, and therefore will not benefit financially from the sale. While its press release said the secondary offering was "designed to improve liquidity" in its publicly traded stock, it's unlikely to have much of an impact, as more than 100 million shares were already available on the market for trading purposes. This is more about major stockholders selling off some of their shares to other investors. Insider sales can often be a red flag for shareholders, and some of them decided to sell their own shares on the news. 10 stocks we like better than ADT Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and ADT Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of August 1, 2020 Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source