SoundHound AI stock slides on its plans to sell stock

SoundHound AI (SOUN) shares are falling Wednesday afternoon after the company disclosed intentions to sell stock. Market Domination examines the AI-powered speech recognition developer's intraday performance, noting its nature as a meme stock.

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This post was written by Luke Carberry Mogan.

Video transcript

JOSH LIPTON: Finally, SoundHound AI shares dip it in today's trade, and it plans to sell stock. The intended sale comes amid a surge in the stock this year after NVIDIA listed SoundHound, remember, as a holding. So obviously, listen, we've talked about this stock. And we've spoken to the CEO-- a hot stock, another way investors have been looking to play the AI theme. They do, of course, AI voice technology.

Today were down here as the company announced plans to sell stock, entered into an agreement for an at the market equity program. Sounds like they can sell up to 150 millions of stock from time to time. And obviously, these kind of moves, they can spook investors, who then worry about capital dilution.

JULIE HYMAN: Right, basically. So what I thought was interesting today is sometimes when we have gotten these kinds of announcements from so-called meme stocks and SoundHound is a little meme, right?

JOSH LIPTON: Hmm.

JULIE HYMAN: The shares have actually gone up. But that didn't-- I mean, it actually behaved in a sort of more traditional, rational way in response to this announcement. But as we've talked about, the shares have still more than doubled year to date, even with the soft--

JOSH LIPTON: Up more than 100% already this year.

JULIE HYMAN: Yeah, exactly. So they're taking advantage of that to raise some money.