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 McDermott International (NYSE:MDR) dropped 10% today after announcing an operational update and an equity offering.

So what: The operational update said that profit margin from its backlog of projects won't cover part of restructuring costs or a portion of fixed costs, meaning they're being done at a loss.  

To make matters worse, management is offering 10 million tangible equity units with a stated value of $25. The underwriter has an overallotment option of another 1.5 million units.  

Now what: The tangible equity units will consist of a "prepaid stock purchase contract and an amortizing note." What's unknown at this time is what the actual terms will be. More than likely the unit offering will be highly dilutive to shareholders and, when combined with the weak operational number, gives no reason to buy the stock today.