Red Cat Holdings Plans Public Stock Offering Triggering Shares Drop

Red Cat Holdings (RCAT), a drone technology company, announced an underwritten public offering of its common stock to raise capital for general corporate purposes and investments in its new unmanned surface vessel division. The company may grant underwriters a 30-day option to purchase up to an additional 15% of the shares. This announcement led to a significant decline in RCAT's stock price, with shares dropping around 10% in extended trading. Despite the recent decline, all three analysts covering RCAT maintain a bullish outlook, with a median price target near $15, suggesting upside potential from current levels. Northland Capital Markets is serving as the sole bookrunner for the transaction, which is subject to market conditions and regulatory approvals. The offering reflects Red Cat's efforts to support its growth initiatives amid mixed investor reactions.