Investing.com — Shares of Vertical Aerospace (NYSE: EVTL ) plummeted 31% after the company announced a proposed underwritten public offering. The aerospace company, which specializes in electric aviation, revealed plans to offer $75 million worth of units, each comprising one common share and a combination of Tranche A and Tranche B warrants. The terms of the offer and completion are subject to market conditions, and the company does not guarantee their size or finalization.
The significant decline in the value of the shares reflects the concern of investors about the possible dilution of the shares due to the newly announced offer. Vertical Aerospace said the proceeds from the offering will be allocated to research and development for the VX4, expansion of testing and certification capacity and general corporate purposes.
William Blair is serving as lead bookrunner and Canaccord Genuity is joint bookrunner for the offering. Despite the current downturn, Vertical Aerospace’s intention to advance its electric aerospace technology through offering proceeds underscores the company’s commitment to growth and innovation in the sector.
Vertical Aerospace’s decision to separate the common stock and warrants immediately upon issuance may provide flexibility to investors, but the lack of listing of the offered warrants on any exchange could contribute to negative market reaction.
Shares in the company, which trades under the ticker symbol “EVTL” on the New York Stock Exchange, have faced volatility as it faces challenges in financing its ambitious projects in the competitive aerospace industry. As the market digests the news of the IPO, investors are weighing the potential long-term benefits of the company’s R&D investment against the immediate impact of an increased number of shares.
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