Aurora Innovation (AUR), a self-driving technology company, saw its stock plunge 14.07% in pre-market trading on Wednesday. This sharp decline follows Uber Technologies' announcement of a proposed $1 billion offering of notes exchangeable for Aurora stock, raising concerns about potential dilution and selling pressure.

Uber Technologies, a major stakeholder in Aurora, revealed plans to issue $1 billion in 0.0% Exchangeable Senior Notes due 2028. These notes will be exchangeable for cash or Aurora's Class A Common Stock at an initial exchange rate of 117.6471 units of reference property per $1,000 principal amount, equivalent to an exchange price of approximately $8.50 per Aurora share. Uber intends to use the net proceeds for general purposes, including potential strategic investments.

This move has sparked investor concerns about potential dilution of Aurora's stock value. The relationship between Aurora and Uber dates back to December 2020 when Uber sold its self-driving car unit to Aurora and made a $400 million cash investment in the company. Despite the current downturn, Aurora's stock had shown strong performance this year, gaining about 16% since the start of 2025 and approximately 140% over the past 12 months. The company recently secured a long-term deal with Nvidia and Germany's Continental to deploy driverless trucks, highlighting its ongoing efforts in the autonomous vehicle sector. However, this latest development has cast a shadow over Aurora's near-term stock performance.