AeroVironment stock drops 8% on offering plan to pay off debt

AeroVironment s fell after the defense contractor said it plans to offer $750 million in common stock and $600 million in convertible senior notes

The drone maker said it would use the funding to pay off debt and use leftover ceeds for general purposes such as boosting manufacturing capacity

In this articleAVAV your favorite stocksCREATE FREE ACCOUNTAn image of a Quantix drone made by AeroVironment

David Mcnew | Getty Images News | Getty ImagesAeroVironment s fell 8% Tuesday after the defense contractor said it plans to offer $750 million in common stock and $600 million in convertible senior notes due in 2030 to repay debt

The drone maker said it would use leftover funding for general purposes such as boosting manufacturing capacity

Last week, s of the Arlington, Virginia-based company rallied on strong fourth-quarter results, lifting higher as CNBC's Jim Cramer called it the "next Palantir of hardware. "Read more CNBC newsAmazon CEO Jassy says AI will lead to 'fewer people doing some of the jobs' that get automatedMeta s hit all-time high as Mark Zuckerberg goes on AI hiring blitzJoby Aviation stock pops 12% after company ders first flying taxi to UAERobinhood gives out tokens of OpenAI and SpaceX in Europe

Earlier this month, President Donald Trump signed an executive order int to boost drone duction in the U

And crack down on unauthorized uses

The company also has a high short interest level, which may have contributed to some of the recent gains, creating a short squeeze

This phenomenon occurs when a stock price surges, forcing those shorting the stock to purchase s to cover their positions and prevent losses

Stock Chart IconStock chart iconAerovironment 1 month stock chartWATCH: AeroVironment CEO on European defense spending boost, U

Defense spending and TrumpClosing Bell: Overtime.