Draganfly (NASDAQ:DPRO) stock is falling hard on Thursday after the unmanned aerial vehicles manufacturing company revealed details for a public offering of its shares.
Draganfly is selling 13,400,000 units for a price of 27 cents each. These units contain one share of DPRO stock and one warrant to acquire another of the company’s shares. The warrants have an exercise price of 36 cents per share, are exercisable immediately and expire five years after being issued.
Draganfly notes that the public offering of DPRO stock will generate gross proceeds of $3.6 million. The company says that it plans to use these funds for general corporate purposes. Also worth noting is Maxim Group LLC serving as the sole book-running manager for the public offering.
What This Means for DPRO Stock
A public offering increases the total number of DPRO shares outstanding. That also dilutes current shareholders’ stakes in the company. It makes sense this would result in its shares falling.
Adding to that is the discount on the public offering price. The company’s shares closed out Wednesday at 36 cents each. That has the 27-cent price of the shares in the offering devaluing Draganfly’s shares.
DPRO stock is down 47.7% as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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