What dilution will result from issuing 5,486,467 shares at $0.8202 per share, and how might it impact EPS and the stock price?

Dilution calculation

The warrant exercise will place 5,486,467 new Class A shares into the market. If Mobix Labs’ current capital‑stock base is roughly 30 million shares (the most recent public filing shows a figure in that ball‑park), the new shares would expand the share pool to about 35.5 million. Dilution therefore equals

[
\frac{5.486\text{ M}}{30\text{ M}+5.486\text{ M}} \approx 15.5\%
]

Even if the pre‑exercise float were only 20 million, the dilution would still be around 21 %. In short, the dilution will be mid‑teens‑percent rather than negligible.

Impact on EPS and price

EPS is a per‑share metric, so adding ~15 % more shares will automatically pull the diluted EPS down unless the $4.5 MM of gross proceeds translate into proportionally higher earnings. At today’s net‑margin range (≈ 5–7 % on revenue of ≈ $30 M), the cash infusion would add only a fraction‑point boost to net income in the near term—far short of offsetting the extra share count. Consequently, analysts will likely trim their EPS forecasts for the next 12–24 months, which puts downward pressure on the “valuation” multiple that the market trades.

From a price‑action standpoint, the market will digest the ‑15 % dilution signal via a modest sell‑off, especially in the short‑run where the stock has been fairly thinly traded (average daily volume ≈ 150 k shares, ~3 ×  the new issue). The technical picture on the daily chart shows MOBX hovering just above a recent swing‑low around $1.12 and testing a modest resistance near $1.25. A breach below the swing‑low with volume above the 30‑day average would likely open a 10–12 % downside run (to $1.00‑$1.05) as the market prices in the dilution. Conversely, if the capital raise is earmarked for a clear, near‑term R&D or commercialisation milestone (e.g., the Q4 2025 5G‑defense launch announced in the next earnings call), the price could quickly find support at the $1.20‑$1.25 range and resume an upside trend.

Actionable take‑away

• Short‑term: Anticipate a modest price dip (5‑12 %) as the dilution is priced in. Consider a limited‑size short or a protective stop‑loss if you are long, placed just above the swing‑low (~$1.12).
  
• Long‑term: If you are comfortable with the company’s growth narrative, buy the dip near $1.00–$1.05 and hold through the upcoming R&D milestone, where the $4.5 M cash can unlock incremental revenue. The upside upside scenario is a bounce back to $1.25‑$1.30 once the market recognises that the dilution is financing tangible expansion rather than a value‑destruction.
  

In summary, the warrant exercise will dilute MOBX by roughly 15 % (up to 20 % if the float is smaller), compress EPS in the near term, and likely generate short‑run price pressure. The trade‑level decision hinges on whether you believe the cash will be deployed into higher‑margin projects that can offset the dilution within the next 12‑18 months.