Robo.ai Inc. (NASDAQ: AIIO) experienced a significant after-hours plunge of 5.34% on Tuesday, following a day of substantial gains. The sharp reversal comes in the wake of a $300 million investment commitment from a consortium led by Burkhan Capital LLC, raising questions about investor sentiment regarding the terms of the deal.

Earlier in the day, Robo.ai announced that it had entered into a convertible note purchase agreement with Burkhan Capital on September 29. The company agreed to issue and sell a convertible note in a private placement offering for an aggregate amount of $300 million. This news initially drove the stock up by 29% during regular trading hours, with shares reaching $2.49.

However, the after-hours decline suggests that investors may be reassessing the implications of the convertible note structure. Convertible notes can be dilutive to existing shareholders if converted into equity, which might explain the negative reaction. Additionally, the market may be concerned about the terms of the conversion or the company's ability to repay the note if not converted.

Robo.ai plans to use the investment to build out its global platform, which integrates smart devices into an AI-enabled ecosystem populated by blockchain. The funding is also intended to strengthen the company's market presence in the Middle East and potentially expand into North America, Europe, and South Asia. While the strategic direction appears promising, the market's after-hours response indicates that investors may be cautious about the financial structure of the deal and its long-term impact on shareholder value.