What happened

Vuzix Corporation (NASDAQ:VUZI), a maker of smart glasses and augmented reality technology, announced an $85 million public offering of its stock today. Investors didn't take kindly to the news and sent the company's share price tumbling. 

The tech stock was down by 16.4% as of 2:33 p.m. EDT.

So what 

Vuzix said in a press release that the underwritten public offering will sell 4.1 million shares of its common stock to the public at $20.50 per share. The underwriters have the option to sell an additional 621,591 shares. 

A downward line graph on a blue background.

Image source: Getty Images.

Vuzix says it estimates that the net proceeds from the sale of the stock will be about $85 million and that the offering will close on March 30. 

The company said that it will use the money to "accelerate the building of finished goods inventory" as well as for new technology development, and potentially for acquisitions of other companies. In short, the money will be used for any general purpose.

So why did inventors dump Vuzix stock on the news? Because the share price of $20.50 for the offering is well below the $26.32 per share that the company's stock closed at yesterday. 

With the new shares selling for less than Thursday's closing price, it makes the current shares overvalued, and thus some investors sold their positions. 

Now what 

While dropping 16% in one day is a huge share-price swing, it's a very small move compared to Vuzix's stock over the past year. The company's share price is up 1,800% over the past 12 months and has gained 144% since the beginning of this year. 

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