---
title: "Why Rocket Lab Stock Plummeted This Week"
description: "Shares of Rocket Lab (RKLB) fell 10% this week following the announcement of a $750 million equity offering, leading to concerns over shareholder dilution. Despite this, the company's market cap of $2"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/257969372.md"
published_at: "2025-09-18T19:16:03.000Z"
---

# Why Rocket Lab Stock Plummeted This Week

> Shares of Rocket Lab (RKLB) fell 10% this week following the announcement of a $750 million equity offering, leading to concerns over shareholder dilution. Despite this, the company's market cap of $23 billion suggests the dilution impact is around 3%. The stock has surged sixfold in the past year, making this a strategic time to raise funds for expansion, including the launch of its Neutron rocket. However, with a high price-to-sales ratio of 48, investors are advised to be cautious before making significant investments.

Shares of up-and-coming space company **Rocket Lab** (RKLB -0.73%) are down 10% this week as of 2 p.m. ET on Thursday, according to data provided by S&P Global Market Intelligence.

The culprit for this decline came Monday night, when Rocket Lab announced a new $750 million at-the-market equity offering.

Due to the shareholder dilution involved from the higher outstanding share count that comes alongside an equity offering, a drop in share price isn't unwarranted. However, it may not be bad for Rocket Lab and its shareholders over the long run.

## The argument for shareholder dilution in Rocket Lab's case

First, Rocket Lab is home to a market capitalization of approximately $23 billion. This implies that shareholder value could be diluted by roughly 3% -- making this week's 10% drop slightly overdone.

Second, the company's stock is up sixfold in just the last year. A share offering following an incredible run like this is the perfect time to raise cash.

Image source: Getty Images.

Since Rocket Lab is still in hypergrowth mode, it has consistently burned between $100 million and $200 million in free cash flow (FCF) over the last few years.

This week's share offering, with shares at all-time highs, gives the company the best bang for its buck and provides it with cash to fund expansion plans.

Looking to build out its payload capabilities following its $275 million purchase of Geost and aiming to launch its larger, reusable Neutron rocket by year-end, this influx of cash will go a long way toward the company's ambitions.

However, even after this week's decline, Rocket Lab still trades at a sky-high price-to-sales (P/S) ratio of 48, so interested investors shouldn't rush to go "all-in" right now, despite the stock's promising future.

### Related Stocks

- [RKLB.US - Rocket Lab](https://longbridge.com/en/quote/RKLB.US.md)

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| Rocket Lab Corporation $RKLB Stock Holdings Increased by Vanguard Group Inc. | Vanguard Group Inc. increased its stake in Rocket Lab Corporation (NASDAQ:RKLB) by 5.4% in Q3, owning 41.8 million share | [Link](https://longbridge.com/en/news/276451972.md) |
| Rhumbline Advisers Has $24.91 Million Stock Holdings in Rocket Lab Corporation $RKLB | Rhumbline Advisers increased its stake in Rocket Lab Corporation (NASDAQ:RKLB) by 18.7% in Q3, owning 519,934 shares val | [Link](https://longbridge.com/en/news/276112501.md) |
| Florida Financial Advisors LLC Purchases 9,728 Shares of Rocket Lab Corporation $RKLB | Florida Financial Advisors LLC increased its stake in Rocket Lab Corporation (NASDAQ:RKLB) by 62.5% in Q3, acquiring an  | [Link](https://longbridge.com/en/news/275973953.md) |
| Rocket Lab Stock Hits Record High | Rocket Lab Stock Hits Record High | [Link](https://longbridge.com/en/news/260664752.md) |
| Up 591% in a Year, Can Rocket Lab Stock Sustain Its Momentum? | Up 591% in a Year, Can Rocket Lab Stock Sustain Its Momentum? | [Link](https://longbridge.com/en/news/261118502.md) |

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.