Key points
- Applied Optoelectronics (AAOI) disclosed a new $600 million at-the-market stock program on August 21. It is the company's third ATM program of 2026.
- From March through August, AAOI's first two programs raised close to $1.1 billion by selling about 8.1 million shares at prices ranging from $101.72 to $197.26.
- AAOI ended regular trading at $124.77, then fell about 10% to near $112 after hours.
Applied Optoelectronics (AAOI) filed an 8-K after Friday's close disclosing an equity distribution agreement with Raymond James & Associates and Needham & Company to issue and sell up to $600 million of common stock. The filing was accepted at 4:14 p.m. Eastern on August 21. The stock had closed the regular session at $124.77, then traded as low as $110.95 in the post-market and sat near $112 at 6:15 p.m. Eastern, down about 10% from the close.
An at-the-market program sells shares into the open market through the two banks over time, at whatever price the stock happens to be, instead of pricing one block at a discount to a group of institutions. The banks are entitled to 2% of the gross sales price. Applied Optoelectronics has no obligation to sell any shares under the agreement and can suspend it at any time, and the shares come off an automatic shelf registration the company filed in December 2024.
It is the third such program this year, and the $1.1 billion authorized by the first two is already spent.
| Program | Signed | Size | Shares sold | Weighted avg. price |
|---|---|---|---|---|
| First | Feb. 26, raised Mar. 12 | $250M, then $500M | 4,830,426 | $103.51 |
| Second | May 14 | $600M | 3,277,525 | About $183 |
| Third | Aug. 21 | $600M | None yet | Assumed $129.10 |
The first agreement began on February 26 with a $250 million limit. AAOI increased it to $500 million on March 12 and finished the program on April 2, having sold about 4.8 million shares at a $103.51 weighted average. Net proceeds were close to $490 million.
The second $600 million program followed on May 14. According to the quarterly report filed August 6, the company sold 1,943,789 shares during May at an average price of $181.24 and another 1,001,308 shares in June at $197.26. Friday's prospectus supplement reports another 332,428 shares sold after June 30, generating about $49.2 million in gross proceeds. Those sales brought the May program to close to $599 million of its $600 million ceiling.
Through June 30, the first two programs had produced $1,049,814,000 in gross proceeds from 7,775,523 shares. AAOI paid $20,996,000 in commissions to the two banks. Over the first six months of the year, shares outstanding increased 12.5%, from 74,998,000 at year-end 2025 to 84,386,000 on June 30. The company's certificate of incorporation permits up to 120,000,000 shares.
Where the cash has gone
AAOI held $499.7 million in cash and equivalents on June 30, compared with $206.1 million at the end of 2025. During those same six months, property, plant and equipment after depreciation climbed from $376.1 million to $697.1 million. Total assets rose from $1.168 billion to $2.301 billion. At quarter-end, the company had $58.9 million of loans excluding convertible notes, along with $106.5 million in unused borrowing capacity.
Stefan Murry, AAOI's chief financial officer and chief strategy officer, described the expansion in the second-quarter release. "We have a total manufacturing capacity approaching 200,000 units per month and continue to expect by the end of this year that we will be capable of producing around 650,000 pieces of 800G and 1.6 Tb products per month." In that same release, founder and chief executive Thompson Lin said the company expects demand "will continue to outpace our production capacity through mid-2027."
That quarter, covered here on August 6, brought record revenue of $191.9 million, up 86% from a year earlier. Non-GAAP net income was $5.5 million, or $0.06 a share, against a GAAP net loss of $22.8 million. Guidance for the September quarter is $255 million to $290 million of revenue and non-GAAP net income of $10.1 million to $24.0 million, using a share count of about 92.8 million. Coherent (COHR) and Lumentum (LITE) beat on the same 800-gigabit demand in the days after, an optics sweep covered here on August 12.
The dilution math in the filing
The prospectus supplement runs its numbers at an assumed price of $129.10, the August 20 close, which would put the full $600 million at about 4.6 million shares. Net tangible book value per share would go from $19.72 on June 30 to about $26.20, and buyers in the offering would take immediate dilution of about $102.90 a share. Use of proceeds is listed as general corporate purposes, which the filing says may include debt repayment, working capital, capital expenditures and acquisitions. Management will have broad discretion over which, the filing adds.
Separately, a subsidiary of Amazon holds a warrant on 7,945,399 shares at an exercise price of $23.6956, issued in March 2025. Of those, 1,324,233 were exercisable at issuance and the remaining 6,621,166 vest against $4 billion of Amazon purchases over ten years.
The stock reached a 52-week high of $233.67 on May 13 and a 52-week low of $18.50 on November 21, 2025. Against that range, the first program sold at a weighted average of $103.51, the May and June sales went at $181.24 and $197.26, and the shares sold after June 30 went near $148.
The August 6 quarterly report already flagged the possibility: "Should additional liquidity be needed, our Board may authorize issuance of additional common stock under an at-the-market offering in the future." That was fifteen days before Friday's filing.
Figures are from Applied Optoelectronics' SEC filings linked above and from live market data via Robinhood as of 6:15 p.m. Eastern on August 21, 2026. This is general market commentary and not investment advice.
