Shares of APPLIED DIGITAL CORP (APLD) plummeted by 5.03% on Thursday morning after the company filed a registration statement to sell 13.62 million shares of common stock held by certain stockholders.

The company announced that the shares being sold were issued to YA Fund and Northland Securities in private placement offerings. The sale of these shares will dilute the existing shareholders' ownership and is likely the primary reason for the stock's decline.

While the proceeds from the offering will not go to APPLIED DIGITAL CORP directly, the dilution of shares can negatively impact the company's stock price and valuation in the short term. Investors often view such secondary offerings as a negative signal, as they can signify the company's need for additional capital or the existing shareholders' desire to cash out their investments.