For my view: Dilution is often priced in quickly, but not always immediately.
In RKLB’s case:
Thursday: stock rose 6.47% despite the $1.94B share offering.
Friday: stock fell 4.79%, suggesting investors started focusing more on the dilution.
But dilution does not automatically mean the company is worse. Rocket Lab also receives a large amount of new cash to fund growth.
The key question is whether the company can use that money to create more revenue and cash flow than the value given up by existing shareholders.
Simple rule:
New shares → ownership per old share becomes smaller.
New cash → company gets more money to grow.
So I would not judge RKLB only from one day's price movement.
Bottom line: The market can take several days or weeks to fully digest dilution. Watch share count + cash balance + revenue growth + cash flow.
The Top Memory Gainer Friday — Did It Rally on Memory at All?
Memory rose again Friday, but the biggest move had nothing to do with memory. SanDisk +10.99% to $1,791.82, on being added to the S&P 100 effective Monday, replacing Nike. Micron +3.92% to $1,015.80, through $1,000 for the first time this month. SK Hynix +2.46% to $187.50. Intel -0.18% to $108.60. The headline spread runs from double digits to negative, but take out the index event and the memory names moved together. Inclusion buys flow, not demand, and S&P 100 inclusion buys far less flow than the size of the move implies. Is memory still one trade?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments