What: Shares of Allegheny Technologies Inc. (NYSE:ATI) fell 24.2% in May after announcing it was raising a big chunk of capital.

So what: Investors were less than pleased when the specialty metals and components producer announced a convertible debt offering of $250 million that came with a 4.75% coupon rate and would convert into shares at $14.45 per share. That's below where shares started May, and the high coupon shows that there was little interest in offering debt at an attractive rate. Usually, a convertible note comes with a low interest rate, but that's not the case here, which is worrisome.  

Now what: After reporting large losses in each of the last three quarters, Allegheny's management needed cash to get the company through to brighter days. But it's unclear when those better times are going to come, and with sales falling and margins shrinking, this company carries a lot of risk for investors. Beyond that, this convertible offering took away some of the upside there could have been in shares. Until the company shows it can make money in a low-energy-price environment, this is a stock I would be very wary of.

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