What happened 

Shares of shipping company Diana Shipping Inc. (NYSE:DSX) fell as much as 11.5% on Wednesday after announcing a share offering. At 3:30 p.m. EDT, shares were still down 11.4% and bouncing near their low for the day. 

So what

After the market closed on Tuesday, management announced that it has commenced a $70 million share offering with another $10.5 million potentially offered if underwriters exercise their over-allotment. CEO Simeon Palios and other executives and officers have said they will buy about $20 million of shares in the offering. 

Cargo ship on open water at dusk.

Image source: Getty Images.

The proceeds are expected to be used to fund the acquisition of new dry bulk vessels, three of which are already contracted. 

Now what

We don't know exactly at what price the offering will take place, but investors are betting that it'll be lower than where shares were trading yesterday. It's likely the offering will be priced in the next day or two, and investors will get a better idea of where the dilutive offering will take place. Until then, it's a little concerning that Diana Shipping is buying more vessels with dry bulk shipping struggling right now and the company losing money the last two years.

Time will tell if these ships are bought at an attractive price, but right now, investors aren't very excited about the offering, or the expansion of the company's fleet. 

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