Shares of Intuitive Machines Inc. (NASDAQ: LUNR) plummeted 10.10% in after-hours trading on Wednesday following the company's announcement of a proposed $250 million private offering of convertible senior notes due 2030. The sharp decline reflects investors' concerns about potential dilution and the impact on the company's capital structure.

The space technology company intends to offer the notes to qualified institutional buyers, with an additional option for the initial purchasers to buy up to $37.5 million in additional notes. The convertible notes, which will mature on October 1, 2030, can be converted into cash, shares of Intuitive Machines' Class A common stock, or a combination thereof, at the company's discretion.

Intuitive Machines plans to use a portion of the net proceeds to enter into capped call transactions, which are designed to reduce potential dilution to existing shareholders upon conversion of the notes. The remaining funds will be allocated for general corporate purposes, including operations, research and development, and potential acquisitions. While this move may strengthen the company's financial position, the market's immediate reaction suggests concerns about the offering's impact on shareholder value.