What happened 

Shares of energy stock Orbital Energy Group (NASDAQ:OEG) fell as much as 19.1% in trading on Wednesday after the company announced a share offering. Shares, which have held fairly steady all day, are down 18.5% at 2 p.m. EDT. 

So what

The biggest news is that Orbital Energy agreed to sell 10.4 million shares of stock to institutional investors for $3.65 per share. That's still below where shares are trading today, providing new investors with a big discount on the stock.

Solar farm in a field at dusk.

Image source: Getty Images.

Management expects the offering to close on Thursday, and until at least then, I wouldn't expect the stock to jump. Orbital Energy may just need the company to survive after reporting an $18 million loss in the first quarter of 2021 and having just $34.9 million in cash on the balance sheet.

Now what

Orbital Energy is a long way from profitability, and that's one of the reasons it needs to raise cash. While I like some of the markets the company is in -- like solar, natural gas, and electricity transmission -- it hasn't proven the ability to make money. That alone will keep me out of the stock, even with the discount in shares today.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.