JIADE Ltd Prices $0.25 Share Offering, Triggering Dilution Cycle and Bear Case Confirmation

What happened

JIADE Limited announced a registered direct offering of 12 million Class A ordinary shares at $0.25 per share, with potential for up to 48 million more shares within 30 days. This move follows a pattern of equity reliance, as the DeepValue report highlighted negative operating cash flow in FY2024 and 1H2025, forcing previous financings at $0.58. The $0.25 price is well below the $1.00 threshold identified as a key risk, signaling a deepening dilution cycle rather than sustainable growth. Critically, this offering undermines the company's narrative of AI-driven expansion by exposing its dependence on discounted equity to fund operations. Overall, it validates the bear scenario where per-share value erodes due to repeated capital raises amid weak cash generation.

Implication

Investors face immediate dilution from the increased share count, which will pressure earnings per share and intrinsic value. The low offering price anchors future financings at depressed levels, hindering stock recovery and highlighting management's inability to generate positive cash flow. This development casts doubt on post-acquisition synergies, a critical element for any bullish outlook, and aligns with the DeepValue report's bear case of equity-dependent expansion. Stock price is likely to face further downward pressure as market confidence wanes in the face of recurring financing needs. Consequently, shareholders should reassess or reduce positions, as the margin of safety has diminished with this confirmation of structural weaknesses.

Thesis delta

The $0.25 per share offering directly triggers the 'Decreases If' condition from the DeepValue report, which warned of new share prices ≤$1.00 before 2026-05-17 signaling a dilution cycle. This shifts the thesis more firmly towards the bear case, increasing the probability of continued per-share value erosion and validating the POTENTIAL SELL rating. Investors should now expect heightened downside risk unless subsequent filings show a rapid turnaround in operating cash flow, which appears less likely given this financing move.