Valneva SE (VALN), a specialty vaccine company, saw its stock price plummet by 5.25% in Tuesday's pre-market trading session. This significant drop comes on the heels of the company's announcement regarding a substantial shelf registration filing.

According to a statement released by Valneva, the company has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for the potential sale of up to $350 million of its ordinary shares, American depositary shares, and warrants. This shelf offering allows the company to issue securities over time, providing flexibility in raising capital as needed.

The news of this potential dilution appears to have spooked investors, leading to the sharp decline in stock price. Valneva stated that it intends to use the net proceeds from any future offerings to fund various aspects of its business, including manufacturing, commercialization, and research and development of its products and product candidates. Additionally, the funds may be allocated for working capital and general corporate purposes. While this move may strengthen Valneva's financial position in the long term, the immediate market reaction reflects concerns over potential share dilution and its impact on existing shareholders.