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Investing.com -- Senmiao Technology Limited (NASDAQ:AIHS) stock plummeted 22.8% Friday after the company announced a registered direct offering that will dilute existing shareholders.
The Nasdaq-listed company entered into a securities purchase agreement with accredited investors to issue 1,350,000 shares of common stock and pre-funded warrants to purchase an additional 905,000 shares at a price of $1.26 per share. The offering is expected to generate approximately $2.8 million in gross proceeds.
In a separate private placement, Senmiao also agreed to issue warrants to purchase up to 4,510,000 shares of common stock, pending stockholder approval. These warrants will have a 5.5-year term and an exercise price of $1.26 per share.
The company plans to hold a special stockholder meeting within 45 days after the closing of the share sale, which is expected to occur around November 17, 2025, subject to customary closing conditions.
Senmiao indicated that proceeds from the offering will be used for general corporate purposes and working capital. The significant stock decline reflects investor concerns about the dilutive effect of the new share issuance on existing stockholders’ equity.
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