Here’s why MicroVision stock tanked more than 10% on Tuesday morning

MicroVision Inc (NASDAQ: MVIS) was down more than 10% in the stock market on Tuesday morning after the company announced an at-the-market equity offering agreement worth $140 million (£100.36 million) with Craig-Hallum Capital Group. The stock printed an intraday low of $16.70 per share on Tuesday.

“MicroVision may, from time to time, at its discretion offer and sell shares of its common stock having an aggregate value of up to $140 million through Craig-Hallum,” the laser technology company said in its press release on Tuesday.

Net proceeds will be used for general corporate purposes

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According to MicroVision, proceeds from the offering will be used for general corporate purposes, including working capital and capital expenditures. For the existing stockholders, the additional shares are likely to dilute earnings.  Commenting on the news, Chief Executive Sumit Sharma said:

“I am proud of the progress our Company has made in advancing our automotive lidar program. We look forward to more broadly promoting our technology to OEM and Tier 1 suppliers and publicly testing our sensor with external test-site partners. A strong balance sheet gives our potential customers and partners confidence that MicroVision is a capable and trusted long-term supplier.”

The news comes a week after the American technology company named Drew Markham as General Counsel. Markham brings over twenty years of experience in advising technology companies (publicly traded) on mergers and acquisitions, corporate governance, and market transactions. She will report to CEO Sharma.

MicroVision is a target of WallStreetBets

The Redmond-headquartered firm that primarily develops laser scanning technology for projection, 3D sensing, and image capture, recently rose to prominence as it became a target of WallStreetBets. Since the start of June, MicroVision is being increasingly mentioned in the Reddit community. The stock is now set to be added to the Russell 2000 index.

Ever since, traders with a nag for high-risk, high-reward stocks have been investing in MVIS. Those who fixate on fundamental value and put their money on sustainable, predictable stocks, however, are keeping away.

MicroVision started the year at a per-share price of $5.21. In the last week of April, the stock printed its year-to-date high of $26.44 per share. Including the price action on Tuesday, it is now exchanging hands at $17.50 per share. The once a struggling technology company that last year traded for a few cents now has a market cap of $2.75 billion.