Phunware Inc (NASDAQ:PHUN) shares are tumbling Wednesday after the company announced a $7 million registered direct offering.
What Happened: After the market close on Tuesday, Phunware said it entered into a definitive agreement for the issuance and sale of approximately 87.5 million shares of common stock at 8 cents per share.
The direct offering was priced at-the-market under Nasdaq rules. All of the shares in the offering are being offered by Phunware.
Phunware anticipates gross proceeds of approximately $7 million. The company said it plans to use net proceeds for working capital and general corporate purposes, including the expansion of product initiatives such as monetizing its patent portfolio, PhunCoin and PhunToken.
The news comes after Phunware shares surged more than 450% on Tuesday following former President Donald Trump’s landslide win in the Iowa caucus.
Phunware has ties to Trump dating back to 2020 when the company announced that it was working on the development, launch and ongoing management of the Trump-Pence 2020 Reelection Campaign’s mobile application portfolio.
See Also: Trump Hints At Potential Role For Vivek Ramaswamy In His Cabinet If Reelected
PHUN Price Action: Phunware shares closed Tuesday around 42 cents before tumbling on the offering. The stock was down 61.1% at $0.1648 at the time of publication, according to Benzinga Pro.
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