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Investing.com -- Red Cat Holdings Inc (NASDAQ:RCAT) stock tumbled 9% after-hours Wednesday following the company’s announcement of an underwritten public offering of its common stock.
The drone technology company, which integrates robotic hardware and software for military, government, and commercial operations, plans to grant the underwriter a 30-day option to purchase up to an additional 15% of the shares offered. Red Cat intends to use the net proceeds for general corporate and working capital purposes, including operating expenditures and capital investments related to its new unmanned surface vessel division.
Northland Capital Markets is acting as the sole bookrunner for the transaction. The offering is subject to market conditions, and the company noted there can be no assurance regarding the completion or final terms of the offering.
The stock’s decline reflects typical market reaction to public offerings, which often lead to share dilution for existing stockholders. Red Cat did not disclose the number of shares to be offered or the expected pricing in its announcement.
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