Shares of South African gold miner Sibanye Gold (NYSE: SBGL) are down 32% as of 10:45 a.m. EDT today. The catastrophic stock price drop came after the company announced it had finalized the terms of its underwritten renounceable rights offer of $1 billion.
Whenever a company issues additional shares, the market typically responds with a stock price drop. A 32% drop, though, is a bit extreme. When you look at the terms of the rights offer Sibanye just issued, though, this stock price drop seems very much justified.
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