Key Points
Poet beat Wall Street's sales target for the first quarter, but the business posted a larger-than-expected loss.
The company announced the sale of new stock and warrants to raise roughly $400 million.
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Poet Technologies (NASDAQ: POET) stock is getting hit with a big pullback in Friday's trading. The optics-technology company's share price was down 9.4% as of 10:15 a.m. ET. Today's pullback for the stock comes on the heels of a massive rally in yesterday's trading driven by news of the company inking a deal with Lumilens.
Poet published its first-quarter results before the market opened this morning, reporting a wider-than-expected loss on sales that beat the market's expectations. In conjunction with its Q1 report, the company also announced a new capital raise.
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What do Poet's Q1 results mean for investors?
In the first quarter, Poet recorded a loss of $0.08 per share on sales of roughly $0.5 million. The company's loss per share came in $0.03 heavier than expected, but the company's sales beat the average Wall Street analyst estimate by $0.25 million.
With the company's commercialization ramp still at such an early stage, Poet's Q1 sales and earnings don't really tell investors that much. The business recorded an operating cash outflow of $8.8 million in the quarter, which was essentially in line with the $8.9 million loss recorded in the prior-year period.
Poet announces big fundraising move
Along with its Q1 report, Poet announced that entered into an agreement to raise roughly $400 million. The agreement will see the company sell 19.05 million shares of common stock. Poet is also selling a warrant granting the holder the right to purchase an additional 19.05 million shares, and the "combined price of one common share and the accompanying warrant in respect of one common share will be $21." Meanwhile, the warrants will extend for a three-year period and have an exercise price of $26.15 per share.
The new fundraising move will provide Poet with a substantial new source of capital, but there's a catch for current shareholders. The issuing of new stock will have a dilutive impact on the positions of current shareholders.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
