Sidus Space (SIDU) Stock Falls 27% on $25 Million Public Offering News

TLDR

• Sidus Space (NASDAQ:SIDU) stock dropped 27.1% in after-hours trading Monday after announcing a public offering
• The company priced 19.23 million shares of Class A common stock at $1.30 per share
• Expected gross proceeds total approximately $25 million before fees and expenses
• The decline came despite shares closing up 96.5% during regular trading hours Monday
• Proceeds will fund sales, marketing, operations, product development, manufacturing expansion and working capital

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Sidus Space stock took a sharp dive in after-hours trading Monday. The drop came just hours after one of its best trading days in recent memory.

Sidus Space, Inc., SIDU

The space and defense technology company announced a public offering that sent shares tumbling 27.1% after the closing bell. This happened despite the stock closing regular trading up 96.5%.

The company revealed plans to sell 19.23 million shares of its Class A common stock. The offering price sits at $1.30 per share.

Sidus Space expects to raise approximately $25 million in gross proceeds. That figure comes before deducting placement agent fees and offering expenses.

ThinkEquity is serving as the sole placement agent for this best-efforts offering. The company also included an option for pre-funded warrants in the initial announcement.

Funding Plans

Management outlined specific plans for the capital raised. Sales and marketing efforts will receive a portion of the funds.

Operational costs represent another key allocation area. Product development initiatives will also tap into the proceeds.

The company plans to expand its manufacturing capabilities. Working capital and general corporate purposes round out the planned uses.

Recent Performance

The stock’s regular trading session Monday saw massive gains. Shares surged following news of a contract win.

Sidus Space announced it secured work under the Missile Defense Agency SHIELD program. That announcement triggered the 96.5% rally during regular hours.

Public offerings typically pressure stock prices. New share issuances can dilute existing shareholder ownership stakes.

The timing of the offering followed the sharp price increase. Investors appeared to react negatively to potential dilution concerns.

The company did not initially disclose pricing or share count details. Those specifics came in a later announcement Monday evening.

At $1.30 per share, the offering price reflects the post-rally valuation. The 19.23 million shares represent a substantial addition to the float.

Market participants often view public offerings with caution. Companies frequently time these sales during periods of elevated share prices.

Sidus Space operates in the space and defense technology sector. The company provides satellite and space-related services.

The SHIELD program contract win provided the catalyst for Monday’s rally. That military-focused work aligns with the company’s core business.

The after-hours selloff erased a large portion of the day’s gains. The 27.1% drop partially offset the earlier 96.5% surge.

ThinkEquity structured the deal as a best-efforts offering. This means the placement agent will attempt to sell shares but provides no guarantee.

The company expects to close the offering soon, subject to customary closing conditions.

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