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What happened

Shares of natural gas fuel company Clean Energy Fuels Corp (NASDAQ:CLNE) fell 10.1% on Thursday after reporting two transactions that could dilute shareholders long term. Shares plunged throughout the day, with the stock closing only $0.01 over the lowest price of the day. 

So what

On Wednesday, Dec. 21, management disclosed that it increased an equity distribution agreement from $110 million to $200 million. The company hit its limit under the old agreement, so the additional funds were added to the registration, likely meaning further dilution of shares in the future. 

Today, the company announced that it had purchased $50 million of face value 5.25% Convertible Senior Notes due 2018 on the open market, for $42.75 million. This will reduce debt, but when tied to the increased share sale agreement, it can be seen as effectively converting debt into equity. 

Now what

Clean Energy Fuels' losses have slowed in 2016, but the $287.6 million debt load as of the end of the third quarter is a weight that could drag down the company's future. Management clearly sees the opportunity of buying debt back at a discount and issuing shares as more attractive than trying to refinance debt a year or two from now. Investors aren't happy with the move today, but long term, it could prove to be the right move and de-risk the company significantly. 

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