Oklo Inc. (NYSE:OKLO) shares are falling Friday after the company announced a new at-the-market equity offering program that could raise up to $1 billion through the sale of additional stock. Here’s what you should know.
- Oklo stock is feeling bearish pressure. What’s pressuring OKLO stock?
Oklo Sets Up $1 Billion At-The-Market Stock Offering
Oklo entered into an equity distribution agreement on September 11 with a group of 10 banks, including Goldman Sachs, BofA Securities, Citigroup, J.P. Morgan, Morgan Stanley, Barclays, Cantor Fitzgerald, Guggenheim Securities, Canaccord Genuity and B. Riley Securities, giving the company the ability to sell up to $1 billion worth of Class A common stock over time through those banks acting as sales agents.
Under the arrangement, Oklo can choose when and how much stock to sell, using methods ranging from ordinary brokerage transactions and trades through market makers on the New York Stock Exchange to privately negotiated deals and block trades. Pricing on any shares sold would track wherever the market happens to be at the time, whether that’s the going rate, something derived from it or a figure both sides hash out directly.
Oklo gets to call the shots on how many shares are sold on a given day and sets a floor price it won’t dip below, meaning the company can simply hold off on selling entirely whenever the market doesn’t meet its terms.
For their part, the participating banks stand to collect as much as 1.5% of whatever gross amount comes in from stock they place, on top of having certain costs of running the program picked up by Oklo. The whole arrangement stays live only as long as both sides want it to, since either Oklo or the bank group can pull the plug and shut the program down.
Programs like this tend to pressure a stock because selling more shares dilutes existing shareholders, spreading ownership and per-share earnings across a larger base. Investors often price in some of that dilution as soon as a program is announced, even before any shares are actually sold.
OKLO Shares Are Dropping
OKLO Price Action: Oklo shares were down 7.00% at $37.09 at the time of publication on Friday. The stock is trading near its 52-week low of $36.61, according to Benzinga Pro.
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