Innoviz Technologies (INVZ) shares took a nosedive Tuesday after the lidar company revealed a $30 million registered direct offering of ordinary shares to institutional investors. The stock was down nearly 30% at $0.44 at the time of publication, according to market data.

Here's the deal: Innoviz entered into a definitive agreement to sell 66.7 million ordinary shares, which should generate about $30 million in gross proceeds before expenses. The offering is expected to close on or about July 29, subject to the usual conditions. Titan Partners is acting as the sole placement agent, while WestPark Capital Inc. is serving as financial adviser.

So why did the stock fall? Registered direct offerings like this one often weigh on a company's stock because they increase the number of outstanding shares, diluting existing shareholders' ownership. Investors also tend to view such capital raises as a sign that the company needs additional funding, which can spook the market.

Innoviz plans to use the net proceeds for general corporate purposes, including supporting the commercialization of Perciz, its dedicated security and defense brand. The company develops automotive-grade lidar sensor platforms and perception software for automotive, industrial, security, and defense applications. Through Perciz, it's expanding its automotive lidar technology into defense, homeland security, and critical infrastructure markets.

For now, the market is reacting to the dilution, and the stock is taking a hit. Whether the capital raise pays off in the long run will depend on how well Innoviz executes its growth strategy.