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Applied Optoelectronics, Inc. (NASDAQ:AAOI) disclosed Friday that it has entered into an Equity Distribution Agreement with Raymond James & Associates, Inc. and Needham & Company, LLC. Under this agreement, the company may offer and sell shares of its common stock with an aggregate value of up to $180 million from time to time through the designated sales agents.
The company stated that sales of the shares will be conducted as "at the market" offerings as defined by Rule 415 of the Securities Act of 1933. Transactions may take place through the Nasdaq Global Market, other trading markets, or as otherwise agreed with the sales agents. Each placement notice will specify the maximum number of shares to be sold, the time period for sales, a minimum price, and any daily sales limitations. The timing of this offering is notable as the stock has taken a significant hit, dropping 18.2% over the past week, though it remains 62.6% higher year-over-year.
The sales agents will receive a commission of 2% of the gross sales price of shares sold. Applied Optoelectronics has also agreed to reimburse the agents for certain expenses, including up to $10,000 for regulatory filings and up to $30,000 for reasonable out-of-pocket costs if the agreement is terminated under particular conditions and a minimum amount of shares is not sold.
The company may suspend or terminate the offering at any time and is not obligated to sell any shares under the agreement. The offering will end when all shares covered by the agreement have been sold or if terminated by either party. With a current market capitalization of approximately $2 billion and a debt-to-equity ratio of 0.42, the company operates with a moderate level of debt while maintaining a healthy current ratio of 2.31, indicating its short-term liquidity position remains solid despite not being profitable over the last twelve months.
The shares to be sold under this program are registered under the company’s automatic shelf registration statement on Form S-3ASR, as supplemented by a prospectus filed with the Securities and Exchange Commission on Friday.
This information is based on a press release statement included in the company’s Form 8-K filing with the SEC.
In other recent news, Applied Optoelectronics announced its third-quarter 2025 earnings, which did not meet expectations. The company reported a larger-than-expected loss per share, with revenue also falling slightly below forecasts. Despite this earnings miss, Applied Optoelectronics noted significant year-over-year revenue growth, indicating some positive momentum. The company also emphasized its ongoing strategic initiatives to expand market presence. These developments come as investors and analysts closely monitor the company’s performance. No recent analyst upgrades or downgrades were reported for Applied Optoelectronics. The focus remains on how the company’s strategic efforts will impact future earnings and revenue.
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