What happened
Cutting-edge automotive tech company Innoviz Technologies (INVZ -0.94%) wasn't so cutting-edge on the stock exchange Thursday. The company's shares closed nearly 8% lower, against the relatively modest 2% decline of the S&P 500, on the news that it's seeking a big chunk of new financing.
So what
In a regulatory filing, Innoviz divulged that it aims to raise $200 million from investors. It plans to do so by issuing fresh common stock, warrants, debt instruments, and units. This will be effected in one or more issues, the company added.
The filing took the form of a shelf registration, a document which serves to flag a company's intention to raise money.
As such, these documents are often not very specific regarding the types of financing instruments, timing, purpose, etc. This was the case with Innoviz's filing, although it's likely that somewhat early-stage company simply aims to shore up its finances.
Now what
Still, investors were justified in being concerned. Israel-based Innoviz has a bit over 135 million shares outstanding and a market capitalization of just under $670 million. If most or all of its planned $200 million financing is effected in stock, such an issue could be very dilutive to existing shareholders.
And while its position as a reputable maker of lidar solutions -- considered to be crucial technology for assisted-driving and (eventually) autonomous vehicles -- gives it a decent shot at success, the company has been consistently loss-making. Its current level of long-term debt well exceeds revenue, a factor that might make the issuance of debt instruments somewhat of a challenge.
