Why Intuitive Machines Stock Crashed Today

Moon explorer Intuitive Machines (NASDAQ: LUNR) banal tumbled 16% done 9:45 a.m. ET Wednesday aft revealing however it plans to make its concern aft paying $800 cardinal to bargain Advent's Lanteris satellite-building business.

Intuitive volition merchantability $175 cardinal successful banal and usage the proceeds to bolster its slope account.

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You retrieve this deal. Intuitive Machines has a $4.8 cardinal declaration to physique a outer communications web betwixt the Earth and satellite for NASA. To assistance physique the satellites it needs to tally the network, and gain each the wealth it's been promised, Intuitive bought Lanteris, which specializes successful gathering satellites.

This acquisition closed successful January. Intuitive paid $450 cardinal successful currency and $350 cardinal successful banal for Lanteris. The currency payment, however, took a wound retired of Intuitive's $622 cardinal slope account. (We'll find retired precisely however overmuch erstwhile Intuitive reports net March 19.)

To guarantee it has each the wealth it needs to proceed gathering retired its "Near Space Network," Intuitive volition rise a spot much currency done a banal sale.

In sec filings, Intuitive clarifies it volition merchantability $175 cardinal successful banal to definite unidentified "global organization investors." The shares are priced astatine $15.12. Closing is Friday, Feb. 27, instantly adding 11.6 cardinal shares to Intuitive's shares outstanding.

Combined with the shares issued to Advent arsenic compensation for Lanteris (assuming they were valued astatine Intuitive's Jan. 13 terms of $17.57, this would beryllium 19.9 cardinal shares), we're looking astatine a full of astir 31.5 cardinal shares added to Intuitive's full stock count. That's astir 26.5% stock dilution by my count.

If each Intuitive banal goes down contiguous is 16%, shareholders volition beryllium getting disconnected easy.

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