Vertical Aerospace ($EVTL) drops 36% today on news of a '$100 million financing commitment' to advance certification. To the untrained eye, 'financing' sounds like progress. To anyone who can read a balance sheet, it's a massive dilution warning for a company with a $337M market cap.
The retail crowd loves to 'buy the dip' on these drops, thinking they got a bargain. But the historical base rate is cold: catalyst-driven gap-downs like this close red 59% of the time across 865 similar setups. The initial drop is rarely the bottom when new shares are hitting the bid.
What is your rule for trading dilution events?