Dragonfly Energy Stock Plummets 27% After Announcing $25M Offering
The dilutive share offering at $1.25 per share comes just a week after the energy storage company's stock surged over 100%.
Shares of Dragonfly Energy (DFLI) plummeted more than 27% on Monday following the announcement of a discounted $25 million public stock offering. The move abruptly halted a week of spectacular gains for the energy storage solutions provider and highlights the dilutive cost of raising capital in a volatile market.
The company announced it was pricing an at $1.25 per share. This price represented a significant discount to its recent trading levels, triggering a sharp sell-off as existing shareholders reacted to the dilution of their stakes. Gross proceeds from the offering are expected to be approximately $25 million.
The timing of the capital raise is particularly notable, coming on the heels of a more than 100% surge in the stock's value just last week. That rally was fueled by news that Dragonfly Energy was , an award of approximately $300,000 aimed at modernizing its manufacturing systems.
According to the company, the proceeds from the stock sale are earmarked for working capital and general corporate purposes. A portion of the funds will be used to repay a $4 million term loan, with the remainder intended to support the scaling of its dry electrode process for , a critical component of its next-generation technology roadmap.
Despite a six-month increase of over 117%, Monday's sharp decline pushes the stock's year-to-date performance further into negative territory, now down over 55% for the year. The offering underscores the financial pressures on emerging technology companies that must balance the need for growth capital with the risk of alienating their investor base through dilutive financing.