Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
Shares of aerospace and defense company Redwire (NYSE:RDW)
fell 17% in the morning session after the company priced a public offering for roughly 15.5 million shares of its common stock at $16.75 per share. The gross proceeds from the offering were expected to be around $260 million.
While some companies burn cash to fuel expansion, others struggle to turn spending into sustainable growth.
A high cash burn rate without a strong balance sheet can leave investors exposed to significant downside.
Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around.
Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.
Mason, a lunar and Martian construction tool by Redwire Corporation, has passed a key NASA milestone, aiming to cut costs and improve safety for future space missions.
Aerospace and defense company Redwire (NYSE:RDW) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 30.1% year on year to $61.4 million. Its GAAP loss of $0.09 per share increased from -$0.17 in the same quarter last year.
Redwire Corporation (NYSE: RDW) shares rise 19% premarket after delivering onboard computer developed by subsidiary for ESA's Comet Interceptor mission.
