Shares of Graphite One Inc. experienced a sharp sell-off on February 10, 2026, after the resource development company finalized the terms for a substantial capital raise. Investor concern over significant equity dilution, triggered by a pricing well below the prevailing market rate, fueled the decline.
Financing Targets Battery Anode Plant Development
The company announced a public offering of 17.142 million units at a price of C$1.75 each, aiming for gross proceeds of approximately C$30 million. Each unit comprises one common share and one warrant. Every warrant entitles the holder to purchase an additional common share at C$2.25 at any point within a 36-month period.
Graphite One stated that the net proceeds are earmarked for its planned active anode material (AAM) manufacturing facility. The funds will specifically support:
– Design and engineering work
– Permitting processes
– Equipment purchases
– General corporate purposes
This project is central to the company’s strategy of establishing a vertically integrated graphite supply chain in North America to serve the lithium-ion battery market for electric vehicles and energy storage systems.
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Market Reacts to Dilutive Pricing
The offering price represented a notable discount to the stock’s previous closing price of C$1.89. The market’s reaction was swift and severe. During Tuesday’s session, the equity plummeted roughly 14.8%, at one point hitting a low of C$1.57.
Trading volume surged to around 745,460 shares, marking an 84% increase over the daily average of 405,121 shares. The sharp price drop reflects investor apprehension regarding the dilutive impact of introducing a large number of new shares at a discounted valuation.
Offering Details and Timeline
BMO Capital Markets is acting as the lead underwriter for a syndicate of banks in connection with the offering. The underwriters have also been granted an over-allotment option, allowing them to purchase up to an additional C$5 million worth of units for a period of 30 days following the deal’s closing.
The transaction is scheduled for completion on or about February 18, 2026. This closing is subject to the receipt of all necessary regulatory approvals, including that of the TSX Venture Exchange. The distribution is being conducted pursuant to a prospectus supplement to the company’s existing short form base shelf prospectus dated January 20, 2026, across all Canadian provinces except Quebec. Private placement offerings in the United States are also part of the plan.
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