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 SandRidge Energy Inc (UNKNOWN:SD.DL) fell as much as 11% in early morning trading, before recovering a bit.

SD Price Chart

SD Price data by YCharts

The early slump was the result of the company announcing that it was raising $1 billion of new debt. It intends to use the proceeds to pay down its credit facility and to bolster its cash balance.

So what: SandRidge's move is a real head scratcher. The company's CEO said on its first quarter conference call that it had $1 billion more debt than it would like to have given the current market conditions. Further, the company just engaged in a debt-for-equity swap with one of its bondholders suggesting it might use more equity to knock out some of its debt. However, the company is now issuing a huge slug of new debt, which will be added to its massive total shown on the chart below.

SD Net Total Long Term Debt (Quarterly) Chart

SD Net Total Long Term Debt (Quarterly) data by YCharts

That's a lot of debt for a company with an enterprise value just over $5 billion.

What SandRidge appears to be doing is raising cash now just in case it can't raise it later. Further, the company is also reducing the borrowing base on its revolving credit facility from $900 million to $500 million as a result of this new debt issuance, so in a sense it is just taking that money now. Overall, the new debt will boost the company's overall liquidity, even if it does put the company even deeper in debt.

Now what: SandRidge's focus appears to be on ensuring its near-term liquidity to give it more time while it addresses its long-term debt situation. However, raising new debt is an odd way to deal with a debt problem so it remains to be seen if other moves are in the works. Until the overall debt picture is addressed SandRidge Energy remains a high risk stock.