Shares of Ouster slid in pre-open trading after the company disclosed details of a new underwritten public offering. The lidar technology company said it priced approximately 3.6 million shares at $55.22 apiece, a move that is expected to generate roughly $200 million in gross proceeds before underwriting discounts and other expenses.
The per-share offering price represented a noticeable markdown from the stock's previous close of $60.02, which itself had been trading near the 52-week high of $63.79. That immediate discount made the dilutive impact of the new offering apparent to investors.
On the same day, Ouster filed a Form S-3ASR automatic shelf registration statement with the Securities and Exchange Commission and submitted a Form 424B5 prospectus supplement. Those filings together signal the company's preparedness to tap capital markets again in the future, creating an overhang from potential additional share issuance.
Under the terms of the deal, the underwriters were granted a 30-day option to purchase up to approximately 543,000 additional shares at the offering price. If the option is exercised, existing holders would face further dilution.
Market conditions provided little support. U.S. stock futures were mixed and the Nasdaq was under pressure ahead of the June nonfarm payrolls report, which was slated to be released a day early because of Friday's Independence Day market closure. Investors were also paying attention to remarks from Federal Reserve Chair Kevin Warsh at the European Central Bank's annual symposium in Portugal, and markets were increasingly pricing in a more hawkish Fed stance. Such a backdrop is a headwind for high-beta, pre-profitability growth names like Ouster.
Taken together, the discounted share issuance, the SEC filings indicating readiness for further capital activity, and a risk-off pre-market tone combined to push Ouster shares lower. At one point the stock was trading at $56.41, a level well below an earlier session high of $63.60, as investors adjusted positions in light of the new supply of shares that could enter the market.
Contextual note: The facts above are drawn from the company's announced offering terms, the SEC filings it submitted, and prevailing market conditions reported around the time of the disclosures.