Paranovus Entertainment Technology Ltd. (NASDAQ:PAVS) stock is extending its downward momentum into Thursday's session.The primary catalyst dragging the micro-cap stock lower is widespread investor anxiety regarding potential shareholder dilution.Nasdaq futures are up 1.30% while S&P 500 futures have gained 0.78%.The concern stems from a sweeping new prospectus supplement filed earlier this week, which authorizes the sale of up to $194.9 million in Class A Ordinary Shares.The company appointed AC Sunshine Securities LLC to manage the at-the-market offering, with the firm earning a 3.5% commission on gross sales.Reliving Tuesday's Historic VolatilityThe ongoing selloff directly follows an extraordinary regular session on Tuesday. The equity opened at a modest $1.55 before rocketing to an intraday peak of $26.69—marking a staggering surge of 1,621.94%.Following multiple regulatory trading halts due to the extreme price action, the stock collapsed entirely, ending the day at $1.02.This sudden crash represented a 96.17% decline from its intraday peak, setting up the negative trend that persisted through Wednesday.Scale of Offering Rattles TradersWhile at-the-market mechanisms allow businesses to raise capital gradually on the open market, the scale of this specific offering poses a stark dilution risk.The $194.9 million filing drastically outweighs the company's recent market value. The negative momentum clearly carried over from the prior session.Critical Technical Levels for PAVS Stock to WatchThe bigger-picture trend remains decisively bearish: PAVS is trading 72.1% below its 20-day SMA (at $1.04) and 78.2% below its 50-day SMA (at $1.33), showing how far the price has fallen away from even short-term trend gauges. The longer-term damage is even clearer with the stock trading 96.3% below the 100-day SMA (at $7.74) and 99.9% below the 200-day SMA (at $320.87).Momentum is deeply stretched, with RSI at 23.84—an oversold reading.