VirTra Inc (VTSI)

[Schneidku40]

You might be forgetting that the capital raise will increase the outstanding share count. Virtra has offered 2.85 million shares in the offering. Presumably, the business won't automatically be worth more because they will still have had the same revenues, earnings, etc., as they did prior to the capital raise. All else being equal, the share price will go down to keep market capitalization near the same.

They will have more cash on the balance sheet and Virtra won't be using it just for operating expenses like many penny stocks, so maybe it won't be a direct 1:1 inverse relationship between share dilution and share price. But I wouldn't expect that investors would see $5-10m more on the balance sheet and increase the company's market cap by the same $5-10m. If that were the case, why wouldn't every company just continually conduct offerings to increase cash? It depends on what they do with the cash. They could go spend it on a big gold statue of Bob and park it in the company lobby. Investors probably wouldn't be too happy about that, although maybe we'd draw in some gold speculators.