Shares of CEVA Inc (NASDAQ: CEVA) tumbled 7.93% in after-hours trading on Monday following the company's announcement of a new public offering of common stock. The sharp decline reflects investors' immediate reaction to the potential dilution of existing shares.

CEVA, a leading licensor of wireless connectivity and smart sensing technologies, revealed its plans to commence an underwritten public offering of its common stock. While the company has not yet disclosed the size or pricing of the offering, such announcements typically lead to a decrease in stock price as investors anticipate an increase in the total number of outstanding shares, which can dilute the value of existing holdings.

Public offerings are a common method for companies to raise capital, which can be used for various purposes such as funding research and development, paying off debt, or financing acquisitions. However, the short-term impact on stock price can be significant, as seen in CEVA's case. Investors will likely be watching closely for further details on the offering and how CEVA plans to use the proceeds, which could influence the stock's performance in the coming days.