Serve Robotics (SERV) stock is taking a beating after the self-driving delivery robot company announced an $80 million registered direct offering. The company says this securities purchase agreement with institutional investors covers 4,210,525 shares of its common stock. The offering closed yesterday and Northland Capital Markets acted as its exclusive placement agent.
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Serve Robotics has already planned what to do with the $80 million in gross funds from this offering. The company will use the money for general corporate purposes, including working capital. Investors will also note that it raised $86 million in new financing in December.
This latest direct offering builds on the $167 million Serve Robotics raised in 2024. The company has raised $220 million since its spinoff from Uber (UBER) in 2021. These funds allow it to continue the development and operations of its autonomous delivery robots.
How This Affects SERV Stock
Serve Robotics stock plummeted on Tuesday after it announced the registered direct offering, with the company’s share falling 18.7% during normal trading hours. This came alongside an increase in trading volume as 21.87 million units changed hands. For comparison, its three-month daily average trading volume is well below that at 5.87 million shares. That negative movement continues today with SERV stock down 2.74% during pre-market trading.
It makes sense that Serve Robotics stock would drop alongside the registered direct offering. While it provides new funding to the company, it does so while increasing the total number of outstanding shares. That dilutes the stakes of current SERV shareholders, explaining why investors were upset with the news.
Is SERV Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Serve Robotics is Strong Buy based on three Buy ratings over the last three months. With that comes an average price target of $14.67, a high of $16, and a low of $12. This represents a potential 21.17% downside for SERV shares.
