AeroVironment Inc. (AVAV) saw its shares plummet 7% in after-hours trading on Monday, following the company's announcement of substantial common stock and convertible notes offerings. The drone maker's stock dropped to $263.75, reacting to the news of a combined $1.35 billion capital raise.
The company revealed plans to offer $750 million in common stock and $600 million in convertible senior notes due 2030. This move, while aimed at repaying existing debt and supporting general corporate purposes including increasing manufacturing capacity, has sparked concerns among investors about potential share dilution and increased debt burden.
J.P. Morgan and BofA Securities are leading the management of these offerings, with Raymond James also involved in the convertible notes offering. The company has granted underwriters a 30-day option to purchase additional shares and notes to cover over-allotments. Market analysts suggest that while the capital raise could strengthen AeroVironment's financial position and growth prospects, the immediate market reaction reflects concerns about the offerings' impact on existing shareholders and the company's financial structure.
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