XNDU Stock Crashed 68%, But It’s Not A New Offering – Retail Traders Call It An ‘Overreaction’

• About 254.7 million shares come from converting Class A shares issued in Xanadu’s merger with Crane Harbor Acquisition Corp.
• The filing also includes 27.5 million shares from a prior private placement.
• Xanadu will not receive proceeds from the resale of the registered shares.

Shares of Xanadu Quantum Technologies (XNDU) crashed more than 65% in pre-market trading on Monday after the company’s prospectus to register up to 293.6 million Class B subordinate voting shares for resale weighed heavily on investor sentiment.

If the pre-market levels hold after the opening bell, XNDU shares would trade at their lowest levels since April 13.

Breaking Down The Potential Offering

The bulk of the shares, about 254.7 million, relates to the conversion of higher-voting Class A shares issued as part of Xanadu’s merger with Crane Harbor Acquisition Corp., the deal that brought the company public.

The filing also includes 27.5 million shares from a prior private placement, 7.33 million founder shares, and roughly 3 million shares held by legacy investors. In addition, up to 157,960 shares may be issued if warrants held by the Royal Bank of Canada are exercised, providing the company with cash proceeds.

Xanadu said it will not receive proceeds from the resale of the registered shares, as they will be sold by existing holders.

Xanadu Quantum Technologies went public on Nasdaq under the ticker ‘XNDU’ on March 27, after completing its merger with Crane Harbor Acquisition Corp. The deal raised about $302 million. The company also announced talks for up to C$390 million (roughly $286 million) in potential funding from the Government of Canada and the Government of Ontario.

Retail Calls Selloff An Overreaction

Despite the sharp pre-market selloff, retail sentiment on Stocktwits turned ‘bullish’ from ‘bearish’ a day earlier, amid ‘high’ message volumes. It was among the top trending tickers on the platform at the time of writing.

One user said the “overreaction is an understatement” while analyzing the drop.

Another user said the market “overreacted to the news.”

Read also: NCLH Stock Slips Pre-Market: Cruise Giant Flags Booking Weakness – Retail Slams Guidance Cut As ‘Terrible’

For updates and corrections, email newsroom[at]stocktwits[dot]com.