Key Takeaways
- SoundHound AI announced a $150 million stock sale Wednesday, and said the first $55 million brought in would go to “general corporate purposes and working capital,” including possible acquisitions.
- The provider of artificial intelligence (AI) products for speech and sound recognition explained if more than $55 million was raised, that cash would go to pay off debt.
- SoundHound AI shares soared in March when Nvidia reported it had taken a stake in the firm, but they’ve been sliding ever since, including 9% intraday Wednesday following the announcement.
The recent big run-up of SoundHound AI (SOUN) shares continued to erode Wednesday after the provider of artificial intelligence (AI) products for speech and sound recognition announced a stock sale.
SoundHound AI reported that it has entered into an agreement with five financial institutions to sell up to $150 million worth of its shares from time to time.
The company explained that the first $55 million raised would be used for “general corporate purposes and working capital,” which it noted may include “investing in or acquiring synergistic or complementary businesses, assets or technologies.” It added that if it brought in more than $55 million, that money would be used to pay off debt.
In March, SoundHound shares had soared more than 300% from the beginning of the year after AI darling Nvidia (NVDA) disclosed it had taken a stake in the company.
However, they have steadily slipped over the last month on concerns about the firm’s financial footing. Still, even with Wednesday’s 9% decline to $4.40 as of 11:30 a.m. ET, shares have more than doubled in 2024.
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