Summit Wireless Stock Fakes Out Investors

Shares of Summit Wireless Technologies, Inc. WISA pulled a serious head fake on investors.

What Happened: On Thursday morning, the company announced it launched a storefront on Amazon.com, Inc. AMZN. Investors took this to be great news and drove the stock up to $7.06.

By the close, the sellers overpowered the buyers and drove the stock lower. The closing price was $4.60.

What Happened Next: On Thursday night, the company announced it would be issuing 2.5 million shares new shares at $4 each.

When companies announce new share offerings, it’s usually bearish for the stock. This is because the market perceives that if the company’s management thinks it’s a good price to sell at, the shares are either fairly or overvalued.

WISA Price Action: Summit Wireless is trading below the important $4 level at publication time, down 17.6% at $3.79.