Why Lilium Shares Are Dropping

Lilium N.V. LILM shares are dropping Friday after the company announced pricing of $114 million in financing.

The Details:

Lilium announced $114 million in financing, including the pricing of a $40 million underwritten public offering of 38,095,238 of the company’s Class A ordinary shares and warrants to purchase 38,095,238 shares, as well as a concurrent $50 million private placement of 47,573,111 Shares and warrants to purchase 47,573,111 shares 

Additionally, Lilium will issue to Aceville a pro rata warrant to purchase 24,233,035 shares at an exercise price of $1.05 per share, and Aceville has agreed to partially prepay $1.00 of the total exercise price for an aggregate prepay price of $24.23 million.

Lilium shares are moving lower on heavy trading volume following the announcement. According to data from Benzinga Pro, more than 8 million shares have already been traded in the session, compared to the stock’s 100-day average of 2.212 million shares.

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How To Buy LILM Stock:

By now you're likely curious about how to participate in the market for Lilium – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.

In the the case of Lilium, which is trading at $0.89 as of publishing time, $100 would buy you 112.36 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

LILM Price Action: According to Benzinga Pro, Lilium shares are down 15.4% at 89 cents at the time of publication Friday.

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