Senmiao Tumbles 36% on $6 Million Public Offering of Shares

The automobile transaction facilitator is on track to close below $1 per share for the 16th straight trading day.

Author: Anthony Russo   

The stock in Senmiao Technology Ltd. (Nasdaq: AIHS) tumbled nearly 36% to 51 cents per American depositary share in early trading Tuesday after announcing a public offering of shares to raise around $6 million.

The automobile transaction facilitator said in a statement today that it is offering 12 million shares of common stock priced at 50 cents per share. The underwriters have a 45-day option to purchase up to an additional 1.8 million shares, which would generate proceeds of the offering to nearly $7 million. The joint book-runners are Benchmark Company, LLC, and Axiom Capital Management, Inc. 

The move today follows Senmiao's announcement Monday in which it signed a three-year deal with the automobile dealership Sichuan Hongyu Enterprise Management Co., Ltd. to "facilitate the purchase of electric vehicles (EVs) and cross-promote their brands, products and services."

Under the three-year partnership, Senmiao said it plans to facilitate the purchase of more than 2,000 EVs at friendly costs for ride-hailing drivers and commercial use. While the news sent Senmiao 19% higher Monday at the close of trading, it turned out to be short-lived as its stock came crashing down today. Shares of Senmiao are now on pace to close below $1 per share for the 16th consecutive trading day.

Based in Chengdu, Senmiao provides automobile services including sales facilitation and services for purchasing vehicles and financing. The company made its trading debut in March 2018, raising $12 million, but remains down significantly from its IPO pricing of $4 per share.  

In the year ending March 31, Senmiao posted revenue of $15.66 million, up 514% year-over-year. However, net loss widened to $9.94 million versus $4.54 million in the same period in the previous year. 

Shares of Senmiao are down 27% year-to-date.