Serve Robotics (SERV) stock plummeted 15.29% in the pre-market trading session on Tuesday, following the company's announcement of an $80 million registered direct offering of common stock.

The autonomous sidewalk delivery company entered into securities purchase agreements with certain institutional investors for the purchase and sale of 4,210,525 shares of common stock. The offering is expected to result in gross proceeds of approximately $80 million before deducting placement agent fees and other offering expenses.

Serve Robotics stated that it intends to use the net proceeds from the offering for general corporate purposes, including working capital. The offering is expected to close on or about January 7, 2025, subject to the satisfaction of customary closing conditions. The sizable equity dilution due to the new share issuance appears to be the primary reason behind the significant drop in SERV's stock price.