Military drone specialist AeroVironment (AVAV -0.01%) has generally done well as a stock lately. But that didn't happen this week, as news of a round of capital-raising dampened investor sentiment on the company.
AeroVironment NASDAQ: AVAV investors have been on a stomach-churning rollercoaster. The unmanned systems leader saw its stock price surge to a new 52-week high, reaching nearly $295 per share, after releasing a blockbuster earnings report on June 24, 2025.
AeroVironment Inc (NASDAQ: AVAV) opened more than 7.0% down this morning after revealing plans to raise about $1.35 billion in fresh capital. The defense contractor will raise $750 million through a common stock offering with the balance coming from convertible senior notes expiring in 2030, according to its press release on Tuesday.
AeroVironment shares fell after the defense contractor said it plans to offer $750 million in common stock and $600 million in convertible senior notes. The drone maker said it would use the funding to pay off debt and use leftover proceeds for general purposes such as boosting manufacturing capacity.
The U.S. defense industry is unmatched, backed by nearly $1 trillion in annual spending, supporting my long-standing investment in dividend-paying giants. A new wave of disruptors is shaking things up, blending AI and autonomy to chase growth, but sky-high valuations demand caution and realism. I prefer reliable incumbents, but I'm closely tracking promising innovators, because in this evolving...
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