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What: Shares of Freeport-McMoRan (NYSE:FCX) have declined by as much as 13% in early-morning trading after jumping 11% yesterday. All of this stock volatility lately is around the company's plan to raise $1 billion by issuing new equity for the company, and the news that China devalued its currency.

So what: Stop me if you've heard this story before: A company acquires a business at the top of the market and then finds itself in trouble when the market for that product collapses. This is the situation that Freeport finds itself in after buying Plains Exploration and McMoRan Exploration for $9 billion back in 2012. Now, with more than $20 billion in debt on the books and weak commodity prices, the company is looking for ways to raise funds through either asset sales or even spinning off those same assets it bought into a new entity. 

This most recent issuance of shares was just another tool in the box that Freeport is using to raise funds, and for a day it appeared that the market liked the idea of issuing new shares rather than more self-mutilizing asset sales. Today, though, it appears that those who liked the idea yesterday were reminded that the $1 billion in equity isn't going to put a very big dent in that debt load, and that it likely will not stop the oil and gas business from going public.

What else likely has investors nervous is China's Central Bank's decision to devalue its currency. When any central bank does this, it makes its own exports cheaper and encourages higher exports, but also reduces purchasing power for imports. Since China is responsible for 40% of the world's copper and is also the world's largest importer of oil, it will put even further lower pressure on the price of these commodities, which is quite possibly the worst thing for Freeport.

Now what: The real cure for Freeport-McMoRan's woes today is higher prices on any of its products, preferably its two largest segments: copper and oil. However, it doesn't appear that higher prices for either of those are in the cards anytime soon, with oil supplies still flooding the market and Chinese demand for imported raw materials tepid at best lately. Chances are, the company will need to again do some drastic capital-raising methods like the ones already enacted if prices for commodities remain weak, so perhaps sitting on the sidelines for a while as the company works through these issues is best. 

Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com or on Twitter @TylerCroweFool.

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