Chijet Motor (CJET) Plunges 26.18% as 66% Undervalued Offering Sparks Liquidity Fears

Chijet Motor (CJET) slumped 26.18% on Thursday, marking its third consecutive day of losses with a cumulative drop of 89.74% over three days. The stock hit an intraday low of $0.1895, nearly touching the 52-week bottom of $0.1753, as technical indicators and liquidity pressures deepened investor anxiety. The selloff occurred amid a $0.59-per-share public offering priced 66% below the prior week’s trading price, exacerbating concerns about value erosion and financial stability.

Technical analysis revealed oversold RSI conditions and a bearish MACD (-0.306) during the recent declines, with prices compressing near the lower Bollinger Band ($0.75). The absence of reversal patterns or institutional buying activity suggested panic-driven retail and algorithmic trading amplified volatility. High-volume selling (12.97 million shares) without bid/ask support highlighted deteriorating liquidity, a common feature in low-cap stocks during speculative selloffs.

The public offering on August 16, 2024, further intensified market skepticism. The $0.59-per-share price—66% below recent levels—alongside zero-cash-exercise warrants, signaled acute liquidity stress. The company’s current ratio of 0.11 and -$26.55 million in free cash flow over the past year underscored its precarious financial position. The “best efforts” structure of the offering, coupled with its timing during a sharp price decline, raised fears of forced capital raising amid distress.

Market dynamics indicated a stock-specific selloff, as peers like Tesla (TSLA) and BEEM showed mixed performance. The lack of sector-wide catalysts reinforced that CJET’s turmoil stemmed from internal pressures rather than macroeconomic or industry trends. Historical data on similar micro-cap selloffs suggested a high likelihood of further downside in the absence of institutional intervention, with key support levels ($0.1753, $0.20) critical for near-term stability.

Investors remain cautious as technical exhaustion, liquidity constraints, and dilution risks persist. The offering’s scale—potentially increasing shares outstanding by 135%—and the company’s weak balance sheet metrics highlight ongoing challenges in sustaining shareholder value. Until a confirmed rebound above $0.2035 materializes, CJET’s extreme volatility and illiquidity position it as a high-risk proposition for traders and long-term holders alike.