What Happened?

Shares of aerospace and defense company AeroVironment (NASDAQ: AVAV) fell 8.5% in the afternoon session after the company announced a pair of proposed public offerings to raise capital. The unmanned aircraft maker intends to offer $750 million in common stock and an additional $600 million in convertible senior notes, which are a form of debt that can be converted into company shares. 

This news comes just a week after the company reported strong fourth-quarter earnings that beat Wall Street expectations. The move to raise capital is often viewed cautiously by investors. Issuing new stock can dilute the value of existing shares, while taking on more debt increases a company's financial obligations. AeroVironment stated it plans to use the proceeds to pay down existing debt from its term loan and revolving credit facility, with any remaining funds earmarked for increasing manufacturing capacity.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy AeroVironment? Access our full analysis report here, it’s free.

What The Market Is Telling Us

AeroVironment’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

AeroVironment is up 66.8% since the beginning of the year, and at $260.64 per share, it is trading close to its 52-week high of $284.95 from June 2025. Investors who bought $1,000 worth of AeroVironment’s shares 5 years ago would now be looking at an investment worth $3,430.

Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.