Red Cat Holdings Stock Is Trading Lower Thursday: Here's Why

Red Cat Holdings Inc RCAT shares are moving lower Thursday after the company announced a $30 million registered direct offering of its common stock.

What Happened: Before the market open on Thursday, Red Cat announced it entered into securities purchase agreements with institutional investors for the purchase and sale of approximately 4.72 million shares of common stock.

The drone technology company anticipates gross proceeds of approximately $30 million. The offering is expected to close on or about April 11.

Red Cat said it intends to use the net proceeds from the offering for general corporate purposes. The company had $9.6 million in cash and accounts receivable as of the end of 2024. When Red Cat reported financial results last month, the company noted that it closed on an additional $6 million in financing since the reporting period ended.

Red Cat said last quarter that it expects calendar year 2025 revenue of $80 million to $120 million, including $25 million from non-SRR Black Widow sales, $25 to $65 million in SRR-related Black Widow sales, $25 million in Edge 130 sales and $5 million in Fang FPV sales.

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How To Buy RCAT Stock

By now you're likely curious about how to participate in the market for Red Cat – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

RCAT Price Action: Red Cat Holdings shares were down 9.39% at $6.75 at the time of publication Thursday, according to Benzinga Pro.

This illustration was generated using artificial intelligence via Midjourney.