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Investing.com -- GSI Technology Inc. (NASDAQ:GSIT) stock dropped 11.5% Tuesday after the AI chip developer announced a registered direct offering of shares and pre-funded warrants to a single institutional investor, raising approximately $50 million.
The offering consists of 1,508,462 shares of common stock priced at $10.00 per share and pre-funded warrants to purchase 3,491,538 shares at $9.99 per warrant. The warrants have an exercise price of $0.01 per share. Needham & Company is acting as the sole placement agent for the transaction.
The company, which develops the Gemini Associative Processing Unit for AI and high-performance parallel computing, expects the offering to close around October 22, 2025, subject to customary closing conditions.
GSI Technology plans to use the proceeds, combined with existing cash reserves, for general corporate purposes, including further development of its APU product line. The company is known for providing memory solutions for networking, telecommunications, and military markets.
The significant stock decline reflects typical market reaction to equity offerings, which can dilute existing shareholders’ ownership stakes.
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