Valneva SE (VALN), a specialty vaccine company, saw its stock price plummet by 5.25% in pre-market trading on Tuesday. This significant drop comes on the heels of the company's announcement of a $350 million shelf registration filing with the U.S. Securities and Exchange Commission (SEC).

According to the filing made on Monday, Valneva is preparing for the potential sale of up to $350 million worth of its ordinary shares, American depositary shares (ADSs), and warrants to purchase ordinary shares or ADSs. The company 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 would be allocated for working capital and general corporate purposes.

While shelf registrations are a common financial strategy for publicly traded companies to raise capital, they often lead to negative market reactions due to concerns about potential share dilution. Investors typically view such filings as a signal that the company may issue new shares in the future, which could decrease the value of existing shares. This explains the sharp decline in Valneva's stock price as the market adjusts to this new information and the potential implications for shareholder value.