Shares of Phunware Inc. fell to their lowest level since January after the mobile-advertising software company announced a large stock-sale program.
The at-the-market equity distribution program, where shares are sold at market prices through a broker, aims to raise up to $120 million. This amount is about 161% of Phunware’s current market value of $46 million.
Phunware’s stock dropped 9.6% in midday trading, heading for its lowest close since January 12. This was the day before the stock surged 453.5% on January 16, following Donald Trump’s projected win in Iowa’s Republican caucuses.
The company emphasized that it was not increasing the potential sale of shares as part of a previously registered $200 million universal shelf. CEO Mike Snavely clarified that the company was terminating its prior sales distribution agreement and adding Canaccord Genuity, Roth MKM, and Benchmark Company to the new program.
In February 2022, Phunware had a similar stock-sale agreement with H.C. Wainwright & Co. for up to $100 million. Last week, Phunware ended that agreement, stating there would be no significant termination penalties.
Phunware has been associated with Trump since announcing a strategic partnership with American Made Media Consultants in May 2020 to develop a mobile app for the Trump-Pence 2020 re-election campaign.
After a 1-for-50 reverse stock split in late February to comply with Nasdaq’s listing requirements, Phunware’s stock has risen 39.8% this year but is down 80.6% over the past 12 months.
In its annual report filed in mid-March, Phunware removed its “going concern” warning, indicating no substantial doubt about its ability to continue operations for one year. However, in November, the company had expressed doubts about its ability to continue as a going concern.
Other Trump-linked companies also saw stock movements: Trump Media & Technology Group Corp. dropped 3.8% on Tuesday but is up 157% this year, while Rumble Inc. fell 2.3% but has increased 32.7% this year.
