Investing.com — Vertical Aerospace (NYSE: EVTL ) stock fell 31% after the company announced a proposed underwritten public offering. The aerospace company, which specializes in electric aviation, has revealed plans to offer $75 million in units, each consisting of an ordinary share and a combination of Tranche A and Tranche B warrants. The terms and completion of the offer are subject to market conditions, and the company does not guarantee its size or completion.

The significant decline in the stock price reflects investor concern over the possible dilution of shares due to the newly announced offer. Vertical Aerospace stated that the proceeds from the offering will be allocated to research and development for the VX4, expansion of testing and certification capacities, and general corporate purposes.

William Blair is serving as lead bookrunner, with Canaccord Genuity as joint bookrunner for the offering. Despite the current downturn, Vertical Aerospace’s intention to advance electric aviation technology through the revenues of the offering underscores the company’s commitment to growth and innovation in the sector.

Vertical Aerospace’s decision to separate the ordinary shares and warrants immediately upon issuance may provide flexibility for investors, but the lack of listing for the offered warrants on any exchange may contribute to adverse market reaction.

The company’s stock, which trades under the ticker “EVTL” on the New York Stock Exchange, faces volatility as it navigates the challenges of financing its ambitious projects in the competitive aerospace industry. As the market digests the news of the public offering, investors weigh the potential long-term benefits of the company’s R&D investments against the immediate impact of an increased share count.

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