Shares of DryShips Inc. DRYS are falling sharply in pre-market trading as the company announced a secondary stock offering to pay down $700 million in convertible notes due December 1, 2014.
The company did not specify the number of shares it intends to offer in the secondary, but the effect will obviously be dilutive to existing shareholders.
Deutsche Bank had downgraded the stock last week to Hold with a 2.00 price target after the company pulled a $700 million dollar note offering. Those proceeds would have been used to pay down the convertible notes coming due.
Shares were down 24 percent in pre-market trading at $1.52.
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