Navitas Semiconductor Corp (NVTS) saw its stock plummet 5.49% in pre-market trading on Friday, following the company's announcement of a $100 million private placement of common stock. The semiconductor firm disclosed the news early Friday morning, just moments before the sharp decline in its share price.

Private placements often lead to immediate stock price drops due to their dilutive effect on existing shareholders. When a company issues new shares, it increases the total number of outstanding shares, effectively reducing each existing shareholder's ownership percentage. Moreover, these new shares are typically sold at a discount to the current market price, which can put downward pressure on the stock.

While the short-term impact on Navitas's stock price is negative, the $100 million capital raise could potentially strengthen the company's financial position and fund future growth initiatives. Investors will likely be watching closely to see how Navitas plans to utilize these funds and whether it can translate this capital infusion into long-term value for shareholders.