Intuitive Machines Dilutes Shareholders: Shares Drop 13%, There Could Be Good News

(7min)

Summary

  • Intuitive Machines' stock fell 13.4% after announcing plans to raise nearly $85 million through common stock offerings and private placements, causing a 7% dilution.
  • The ability to raise cash is positive, as it provides liquidity and avoids debt, with a pro forma cash balance of $170 million.
  • Dilution was expected, and the key is whether the common stock offering terms are more attractive than warrant exercises.
  • I remain bullish on LUNR, assuming the capital raise occurs at acceptable terms, avoiding extreme dilution.
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Intuitive Machines (NASDAQ:LUNR) stock has tumbled 13.4% in after-market hours on the news that the company is issuing common stock. This is of course a material development and, in this report, I want to discuss whether the common

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This article was written by

Dhierin Bechai profile picture
17.79K Followers

Dhierin-Perkash Bechai is an aerospace, defense and airline analyst.

Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of LUNR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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