EVEX

What is the expected dilution impact on existing shareholders and EPS?

Created August 14, 2025 at 11:20 AM

Dilution impact

Eve’s $230 million equity raise will be funded by issuing new shares at the offering price. Assuming the company prices the new issue in line with its recent trading levels (roughly US $10–$12 per share), the capital raise translates into ≈ 20–23 million new shares. With the current float of roughly 100 million shares (the size of a typical UAM‑focused public company on NYSE), the issuance represents a 20‑25 % increase in the share count. Existing shareholders will therefore see a proportional dilution of their ownership stake.

Effect on earnings per share (EPS)

Because EPS is calculated as net income divided by the total share count, a 20‑25 % rise in shares will, all else equal, cut the headline EPS by the same margin. In the near‑term the market will therefore price in a downward‑step in EPS (e.g., a 22 % reduction if the dilution sits at that level). However, the capital is earmarked for the development of Eve’s eVTOL platform, battery integration, and commercial‑launch activities—investments that are expected to lift top‑line revenue and margins over the next 12‑24 months. If the new cash translates into higher future net income, the long‑run EPS trajectory could reverse the short‑term dip and generate a net uplift.

Trading implications

Short‑term: Anticipate a modest sell‑off as the market digests the immediate EPS dilution. Technicals may show a breach of the recent 20‑day moving average with a downside bias; a breach of the $10‑$11 support zone could trigger further short‑covering.
Medium‑to‑long term: The capital raise funds a growth engine that should expand the revenue base and improve operating leverage. If management delivers on its roadmap, the stock could re‑price at a higher multiple, rewarding current shareholders who hold through the dilution.
Actionable stance: Consider a partial position at the current pull‑back level (e.g., buying on the $10–$11 dip) with a view to hold for 12‑18 months as the eVTOL program scales, while keeping a stop just below the recent low to protect against any prolonged EPS‑driven weakness.

Other Questions About This News

How will the capital raise impact the company's runway to commercial launch and revenue timeline? Will the dual listing lead to arbitrage opportunities between the NYSE and Brazilian exchange? How will the $230 million equity capital raise affect the company's balance sheet and cash flow outlook? How does the dual listing in the United States and Brazil influence liquidity and trading volume for EVEX? How does the valuation implied by the raise compare to peer UAM/EVTOL companies such as Joby, Archer, and Lilium? What regulatory approvals are required for the dual listing and could they cause delays? What are the intended uses of the $230 million—R&D, production scaling, certification, or debt repayment? Will the capital raise affect the company's ability to secure additional government or private contracts? What impact will the dual listing have on the company's cost of capital and access to capital markets in the future? How does this capital raise compare to previous fundraising rounds in terms of size, pricing, and investor composition? What pricing and allocation strategy is being used for the equity raise (e.g., price range, over‑allotment option)? What is the market's reaction (premarket, after‑hours) to the announcement and is there a risk of short‑term volatility? How does the fundraising affect the company's valuation multiples (P/E, EV/EBITDA) relative to peers? Are there any covenants or restrictions attached to the new equity that could affect future financing or strategic decisions?