Shares of DropCar (DCAR), which offers an automated platform for pick-up and delivery of vehicles for maintenance and service, saw its stock slide over 30% on Wednesday. The sell-off was spurred by investors who panicked after the company said in an SEC filing that it would issue and sell 478,469 shares of its common stock, par value $0.0001 per share, at an offering price of $4.18 per share for gross proceeds of about $2 million.
DCAR stock has more-than-tripled so far this year. This comes as a slight respite after the stock lost 65% of its value in trailing 52 weeks.
The New York City-based firm grew its top line by 405% last year, but many investors are reluctant to bet on this stock that been seeing mounting losses. Meanwhile, bullish investors expect the company to rebound once ride-hailing service Lyft goes public next month.
READ: BMW’S PROFIT WARNING SENDS SHOCKWAVES THROUGH THE US AUTO INDUSTRY
Earlier this month, CEO Spencer Richardson had announced that the company was exploring strategic alternatives, including a potential sale to maximize shareholder value. A stock sale is also likely to lift DropCar’s stock in the coming months.
On March 8, the company launched a 1:6 reverse stock split after its share price fell below $1, to regain Nasdaq compliance.
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