Shares of Ouster Inc. (OUST) tumbled 5.67% in after-hours trading on Monday, following the company's announcement of a significant stock offering. The LiDAR technology firm revealed plans to raise up to $100 million through a new share issuance, a move that typically leads to stock price declines due to potential shareholder dilution.

According to a Securities and Exchange Commission (SEC) filing, Ouster has entered into a market issuance sales agreement with Oppenheimer & Co. The agreement allows for the offering of up to $100 million of Ouster's common stock, providing the company with a substantial influx of capital but potentially diluting the value of existing shares.

The after-hours plunge reflects investors' immediate reaction to the news. Stock offerings often lead to share price declines as they increase the total number of outstanding shares, thereby reducing each share's claim on the company's earnings. While the capital raised can be used for growth initiatives or to strengthen the company's financial position, the short-term impact on stock price is frequently negative. Investors will likely be watching closely to see how Ouster plans to utilize the funds raised from this offering and whether it can translate into long-term value creation that offsets the initial dilution.