Shares of Aurora Innovation (AUR -6.49%) tumbled 6.3% on Wednesday. The autonomous vehicle technology company's stock had been down as much as 17% earlier in the day.

The self-driving technology developer is seeing its stock pressured after Uber announced it plans to issue exchangeable notes that could be converted into Aurora shares, sparking fears of dilution.

Uber announces $1 billion exchangeable note offering

Uber -- Aurora's largest shareholder -- yesterday announced its intention to offer $1 billion in exchangeable senior notes that can be exchanged for cash or used as "reference property," which Uber disclosed would initially consist of Aurora's Class A common stock. This allows Uber to raise cash now without outright selling its stake in Aurora.

Uber became a major shareholder in Aurora after selling its self-driving unit, Advanced Technologies Group, to the company in 2020 in exchange for equity. The deal gave Uber approximately a 26% stake in Aurora at the time.

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Dilution concerns weigh on investors

Aurora shares sank as investors fear the move will dilute the value of each Aurora share. While the notes don't immediately create new Aurora shares, they create a mechanism by which a significant number of shares could suddenly flood the market in the future if those who invest in these notes decide to exchange their notes for shares.

Despite the concerns, I think Aurora is a good pick among self-driving companies for investors with a high risk tolerance. The company recently launched its commercial operations and is now the first to do so in the autonomous trucking industry, a lucrative niche of the overall driverless market and Aurora's specialty. Even though it will take time to scale operations, the company has low debt and nearly $1.2 billion in cash and equivalents, giving it plenty of room to maneuver.