Shares of Taiwan's Wistron Corporation, a supplier to Nvidia, dropped more than 6% on Tuesday following the company's announcement of a $1.47 billion global depositary receipt offering to fund raw material purchases [1]. Wistron priced 25 million global depositary receipts at $58.88 each, representing 250 million new common shares, according to a company filing [1]. The shares were priced at approximately NT$186.24 each, which is about a 5.5% discount to Wistron's Monday closing price of NT$197 [1]. The new shares account for roughly 7.29% of Wistron's outstanding shares before the issuance, and the offering is expected to be issued on Thursday [1]. Proceeds from the sale are earmarked for purchases of raw materials in foreign currencies [1].
Despite the drop, Wistron's shares have risen about 23% so far this year [1]. The fundraising coincides with Wistron's expansion of its AI server business, as the company approved additional capacity investments in Taiwan and the U.S. last month [1]. Specifically, Wistron approved NT$10.5 billion in additional capital expenditure for facilities in Taiwan, and a combined $53 million for two U.S. subsidiaries to support future AI business expansion [1].
In July, Wistron opened its first U.S. manufacturing facility, a $700 million AI server plant in Fort Worth, Texas [1]. The facility currently produces Nvidia's GB300 Grace Blackwell Ultra systems and is expected to expand production to its next-generation Vera Rubin platform [1]. For the second quarter, Wistron reported revenue of NT$895.4 billion and profit after tax of NT$14.8 billion [1].
CONCLUSION
Wistron's significant global stock sale led to a sharp decline in its share price, reflecting investor concerns over dilution and the discounted pricing. However, the company's ongoing expansion in AI server manufacturing and robust year-to-date share performance suggest a strategic focus on growth. The market reaction underscores the balance between short-term dilution and long-term investment in AI infrastructure.