Stardust Power Inc. (SDST) stock is trading sharply lower in Friday premarket trading, reversing part of Thursday's rally as investors digest an updated stock offering and the potential for further dilution.

The stock closed Thursday up 56.39% at $0.2516 after heavy speculative trading.

Stardust Power Expands ATM Capacity

The lithium developer amended its at-the-market equity offering program on Thursday, increasing the amount of common stock it can sell.

The company said it may now offer and sell additional common shares worth up to $8.99 million through B. Riley Securities. The filing updates a previous prospectus supplement covering an offering of up to $5 million.

The additional capacity could provide Stardust Power with fresh capital. However, selling more stock could dilute existing shareholders and pressure the share price.

Financing remains important for the pre-revenue company as it works to develop its planned lithium refinery in Muskogee, Oklahoma. Stardust Power reported just $500,000 in cash at the end of the second quarter.

Muskogee Lithium Project Advances

Meanwhile, Stardust Power provided an update Monday on its proposed lithium refinery in Muskogee, Oklahoma.

The company said Oklahoma Gas and Electric Co. is securing long-lead electrical infrastructure needed to support large-scale power delivery to the planned refinery.

The 66-acre project is expected to produce up to 50,000 metric tons of battery-grade lithium carbonate annually at full capacity. Stardust Power plans to develop the refinery in two phases, with each production train designed for about 25,000 metric tons of annual capacity.

The infrastructure update provides progress on the project even as Stardust Power's financing needs and potential share dilution remain in focus.

SDST Price Action: Stardust Power shares were down 32.83% at $0.16 during premarket trading on Friday, according to market data.