Nov. 26 at 11:47 PM
$STEM I’ve done a deep dive into the S-3 registration statement Stem, Inc. filed today, and for anyone holding the equity long-term, we need to have a serious conversation about capital structure and dilution risk.
The Overhang is Massive.
Stem is registering to sell up to
$200 million in new securities. Context is king here: with ~8.4 million shares outstanding trading around 16.37, their current market cap is only roughly
$137 million.
They are effectively asking for the license to dilute current shareholders up to more than 100%, if necessary. That creates a massive ceiling on the stock price; any rally is now a liquidity event for the company, not a win for shareholders.
Interestingly, they aren't paying a new registration fee. They are utilizing a "fee offset" from a
$600 million shelf they filed back in 2022 but never sold. This signals a shift from a growth-focused capital allocation strategy to a survival-based working capital model.
