What: Shares of bioscience company Amyris Inc (NASDAQ:AMRS) plunged 24% on Wednesday after the company announced a potentially dilutive capital raise.

So what: Amyris announced that it will be offering $50 million of convertible senior notes due 2019 in a private placement. Pricing wasn't given, but the market reacted as if this would be a highly dilutive offering for the company.  

Management said it would be able to pay the interest with stock at a rate of 92.5% of the simple average of the daily volume weighted average price for the 10 days before the payment. This could dilute shareholders but could save cash, something Amyris need to develop new products and grow.

Management also said it may use the funds to repurchase some of the company's outstanding 6.5% convertible senior notes due 2019. Presumably they're expecting better pricing with this new offering than what they would be buying back.

Now what: This was a wild reaction for an offering that may not be all that dilutive to Amyris long-term. And investors knew the company needed more funding to complete expansion plans. Convertible notes allow the company to preserve more cash without being highly dilutive with a stock offering.

I think a big part of the reaction was due to the rebound in Amyris shares recently on hope that new products would speed revenue growth. This may have brought those expectations back to reality, at least short-term. Long-term, I think this is a company with a bright future, but it's highly volatile, and days like this are to be expected from time to time. We'll know more after earnings, but I don't see anything today to make me less bullish on Amyris' long-term future in the disruptive bioscience space.