Here's a familiar story in the markets: a company announces it's selling new shares to raise money, and its existing stock price takes a hit. That's what happened to Abits Group Inc. (ABTS) on Monday. The digital center and bitcoin miner said it entered into definitive agreements for a registered direct offering expected to raise about $2.1 million, and investors promptly sent the shares down.

The deal is pretty straightforward. Abits agreed to sell 792,452 ordinary shares and pre-funded warrants to institutional investors at $2.65 per share. The pre-funded warrants are priced at $2.64999—just a hundred-thousandth of a cent below the share price—and are immediately exercisable. For every warrant sold, the number of ordinary shares offered decreases one-for-one. Gross proceeds, before fees, should hit that $2.1 million mark, with the transaction expected to close around February 24, 2026. The company says it will use the cash for general corporate purposes and working capital, alongside its existing resources.

If you're wondering why the stock fell, think about it from an existing shareholder's perspective. When a company issues new shares, it dilutes the ownership stake of current shareholders. Unless the money raised is going to be used for something that dramatically increases the company's value (and quickly), the pie gets bigger but your slice gets smaller. The market often reacts to this kind of news by marking down the share price, which is essentially what you saw Monday.

What the Charts Are Saying

Let's look at the technical picture. The stock is currently trading about 20% below its 20-day simple moving average, which is a clear sign of short-term weakness. Over the past year, shares have trended lower and are sitting closer to their 52-week lows than their highs. The Relative Strength Index (RSI) is right at 50, which is the neutral midpoint—it suggests the stock isn't overbought or oversold at the moment. There's no MACD data highlighted, which, combined with the neutral RSI, paints a picture of a stock in wait-and-see mode without strong momentum in either direction.

• Key Resistance: $3.00
• Key Support: $2.50

A Slight Ease in Short Interest

Interestingly, while the stock was falling on the offering news, short interest had actually declined slightly in the latest reporting period. It dropped from 38,300 shares to 33,430 shares, which represents about 2.13% of the float. With an average daily trading volume of roughly 7,960 shares, it would take short sellers a little over four days to cover all their positions if they needed to.

When all was said and done on Monday, Abits Group shares were down 20.11%, trading at $2.98.