Shares of Serve Robotics Inc. (NASDAQ: SERV), a leading autonomous sidewalk delivery company, plummeted 12.90% during intraday trading on Friday. This significant drop comes in the wake of the company's announcement of a $100 million registered direct offering of common stock, which has raised concerns among investors about potential share dilution.

According to the company's statement, Serve Robotics has entered into securities purchase agreements with certain institutional investors for a registered direct offering of 6,250,000 shares of common stock. The transaction is expected to generate approximately $100 million in gross proceeds before deducting placement agent fees and other offering expenses. The company intends to use the net proceeds for general corporate purposes, including working capital.

The timing of this offering is particularly noteworthy, as it follows a recent surge in Serve Robotics' stock price. The company's shares had risen significantly in October, with a 29% jump on Thursday alone following the announcement of a partnership with food delivery giant DoorDash. This sequence of events has led some market observers to speculate that the company may have strategically timed its stock offering to capitalize on the inflated share price.

While the capital raise could potentially strengthen Serve Robotics' financial position and support its growth initiatives, the market's negative reaction suggests that investors are wary of the dilutive effect of the new share issuance. As the company moves forward with this offering, market participants will be closely monitoring how Serve Robotics utilizes the newly raised capital and whether it can translate into enhanced growth and profitability in the competitive autonomous delivery sector.