Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of California regional bank Pacific Capital Bancorp (Nasdaq: PCBC) slid 16% in intraday trading on higher-than-average volume.

So what: There's no particular news for the bank today, so what we're likely seeing is typical penny-stock volatility. Investors may also be continui ng to digest what the company's rights offering will mean for shares. Launched in late August, the offering could issue up to 727 million new shares at a price of $0.20 each.

Now what: What can I say really? The bank has been absolutely battered by the recession and housing downturn. At the end of the second quarter, 8.6% of the bank's assets were nonperforming. The bank did receive a $500 million investment from Gerald Ford's private equity fund, but the fund picked up all of its shares at $0.20 and the majority of its investment was in preferred shares, which puts the fund well ahead of common shareholders. "Avoid" isn't nearly a strong enough word to describe how investors should treat this stock.

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