Why WiMi Hologram Cloud Got Crushed Today

Shares of WiMi Hologram Cloud (NASDAQ: WIMI) got crushed on Tuesday after the company announced a substantial stock offering. As of 11 a.m. EDT, the stock was down a whopping 19%.

WiMi is selling almost 11.2 million units -- not shares -- in this offering, similar to a special purpose acquisition company (SPAC). These units include an American Depositary Receipt (ADR) as well as 0.4 warrants. (ADRs are what many international stocks use instead of directly listing shares on a U.S. exchange.) Let's say you purchase 10 of WiMi's units when the offering closes on March 25. You would get 10 ADRs and four warrants, which entitle you to four more ADRs down the road.

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Source Fool.com