Pagaya Technologies (PGY 7.33%) stock crashed 22.5% through 10:45 a.m. ET on Thursday after the financial artificial intelligence (AI) company announced it will raise at least $95 million from a new stock offering.

Pagaya actually warned investors the offering was coming yesterday, but today it revealed the price.

What is Pagaya selling?

That price will be $12.70 per share, which is 18% less than what this AI stock cost just yesterday. And between the offering itself and the overallotment option its underwriters will invoke, Pagaya could sell up to 8.6 million ordinary shares of stock at this price. That's more than the 7.5 million shares it said it would sell yesterday (including overallotment). What's more, these are all supersized shares, issued after the company shrank its share count by 12x with a 1-for-12 reverse stock split on March 8.

On a 63 million share count, this will result in about 13% stock dilution that existing investors will suffer, plus the more visible effect of each share now being worth 18% less. So no wonder investors are upset.

Why is Pagaya selling?

What will investors get in return? Well, if all the shares that can be sold are sold, Pagaya should reap about $109 million in gross proceeds from the stock offering, before deducting discounts, commissions, and the expenses of running the offering. Management says it intends to use this money "for general corporate purposes and to support future growth."

What's curious, though, is that on the one hand, Pagaya burned about $10 million in cash last year (which might explain why it needs to raise cash now). But analysts polled by S&P Global Market Intelligence predict Pagaya will turn free-cash-flow-positive this year, generating in excess of $110 million without the stock sale. Analysts also see Pagaya turning profitable according to generally accepted accounting principles (GAAP) this year, such that it might not need to hold any future stock offerings.

As counterintutive as it sounds, today's stock sell-off just might be a great time to buy Pagaya Technologies stock.