CBAT - Why CBAK Energy Stock Crashed Again on Tuesday
For the second time in less than a month, Chinese automotive battery-maker CBAK Energy Technology (NASDAQ: CBAT) is trading shares for cash, and diluting its shareholders in the process. Investors aren't happy about that -- at all -- and CBAK shares are down a staggering 14.4% as of 10 a.m. EST Tuesday morning.
It was just 20 days ago that CBAK last pulled a stunt like this , trading 3.2 million shares to one of its creditors in repayment of $11.2 million in debt, but valuing its shares (which were worth nearly $10 at the time) at just $3.50 each for purposes of the debt exchange.
Today, CBAK struck a somewhat better deal, announcing that it will be selling more shares (9.5 million) but for a better price ($5.18 each). To sweeten the deal for the private investor that will be buying the new shares, CBAK will also award warrants to purchase an additional 3.8 million shares for $6.46 each, the price CBAK closed at on Monday evening.
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Why CBAK Energy Stock Crashed Again on Tuesday