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 oil and gas exploration company Callon Petroleum (NYSE: CPE) slipped as much as 11% in intraday trading after the company announced it will be selling new shares.

So what: Callon is planning to issue 9 million new shares and provide an overallotment option with an additional 1.4 million shares. For a company with around 29 million shares currently outstanding, that is a hefty amount of dilution for shareholders to digest. Callon says it plans to use the proceeds of the sale for capital spending, general corporate purposes, repaying a chunk of debt, and, potentially, acquisitions.

Now what: The problem with a big share sale like this is that any good investor knows that you want to buy low and sell high. So with Callon's management deciding that now is a good time to sell shares, does that mean the stock is trading at a premium to its true value? The company's borrowing costs are relatively high, and debt always comes with its familiar concerns, but the cost of equity is generally pretty high unless shares are dearly priced. Of course the issuance hasn't been priced yet, so investors will want to keep an eye out for whether the company is able to price the new shares reasonably in line with the market price or whether it has to offer a discount.

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