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Investing.com -- Erayak Power Solution Group Inc. (NASDAQ:RAYA) stock plummeted 53% after the power supply manufacturer announced a registered direct offering that will significantly dilute existing shareholders.
The company entered into a securities purchase agreement with institutional investors for the sale of 107,692,307 Class A ordinary shares at $0.065 per share, representing a steep discount to its previous trading price. The offering, which also includes pre-funded warrants with an exercise price of $0.0001 per share, is expected to raise approximately $7 million in gross proceeds.
Craft Capital Management is serving as the sole placement agent for the transaction, which is anticipated to close around August 1, 2025, pending customary closing conditions.
The substantial share dilution appears to be driving the sharp selloff as the offering price represents a significant discount to Erayak’s prior market value. The company, which describes itself as a leading manufacturer, designer, and exporter of high-quality power supply products, did not specify how it intends to use the proceeds from the offering.
Erayak’s stock reaction reflects typical market response to heavily dilutive equity raises, particularly when priced well below current trading levels.
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