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 Ocean Rig UDW Inc (NASDAQ:ORIG) are sinking today after the company priced its recently announced common stock offering. The company announced that it will issue nearly 28.6 million shares of common stock at $7.00 per share, well below the closing price before the offering was made, which is why the stock is plunging.

ORIG Price data by YCharts.

So what: Ocean Rig was able to raise about $200 million in capital, which it intends to use to boost its working capital and for general corporate purposes, including the acquisition of drilling rigs. Basically the cash infusion enhances the company's flexibility in what's a very choppy offshore drilling market. Further, the equity issuance bolsters the company's balance sheet, which as the chart below notes is weighted down by more than $4 billion in debt.

ORIG Enterprise Value data by YCharts

Because the company has so much debt, it needed to sell stock at a very steep discount. Unfortunately, the company is also really diluting current shareholders, as the $200 million in new equity represents a more than 20% dilution.

Now what: Ocean Rig is hoping to take advantage of the current market turmoil by using the cash to position itself to buy deeply discounted drilling rigs. If it is successful in this endeavour then the equity raise could end up creating value. However, if it doesn't make an accretive acquisition, this equity raise simply amounts to a major dilution for current investors.