Sidus Space (NASDAQ: SIDU) investors have experienced multiple dilutive stock offerings. One such offering in December 2024 occurred after SIDU stock had just risen 300%. On December 17, 2024 Sidus announced the private placement of 6,799,892 shares of Class A common stock and pre-funded warrants through placement agent ThinkEquity.
Under the terms, Sidus Space agreed to sell ThinkEquity the shares for $2.07 each, a significant discount to the day’s closing price of $5.60. ThinkEquity then sold these shares to 32 buyers who purchased them on December 17, 2024, at $2.25. Within a month, SIDU stock settled back to the $2 range. Presumably, the 32 buyers were able to flip their shares in time and realize some easy money.
Through the above private placement, Waqas Khatri, Managing Member of Ayrton Capital LLC, the investment manager to Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B (“Alto”), purchased 483,092 shares of Class A common stock and warrants for another 241,546 shares. Ayrton Capital describes itself on its website as “an absolute-return focused investment firm that combines fundamental research, quantitative analysis and portfolio structuring to identify and allocate capital to attractive investment opportunities.” The website further states Ayrton Capital is “seeking to invest in passionate management teams that are singularly focused on creating value for their stakeholders.” This is likely among the best investor praise Sidus Space CEO Carol Craig has received.
According to a Schedule 13G filed with the SEC, as of December 31, 2024, when SIDU stock was still trading at $4.90 per share, Ayrton Capital still held 483,092 shares of common stock and warrants for 241,546 more shares. According to the latest Schedule 13G Ayrton Capital just filed, they sold all shares of SIDU common stock between then and March 31, 2025. The flip strategy, although arguably wise in this case, does not seem in line with Ayrton’s stated strategy to invest in passionate management teams. Or maybe Ayrton Capital did buy with the intention of holding long, but quickly changed its mind about Sidus’s management team and aborted. Either way, according to the filings, at maximum they held SIDU stock shares for no greater than three and a half months. If they sold in early January, Ayrton Capital would have realized a nice profit on the deal.
Ryan M. Lane, managing member of Empery Asset Management, LP, apparently also got in and got out on this same Private Placement, according to its Schedule 13G. Empery Asset Management’s investment strategy, however, appears more properly described on its LinkedIn profile: “Empery is an event-driven manager based in midtown Manhattan. We focus on direct investments in public companies with market capitalization under $1 billion.” However, it is arguable what event they traded around, other than the event of being sold private placement shares at a below-market price.