What: Shares of CTI BioPharma (NASDAQ:CTIC), a small-cap biopharmaceutical company focused on creating products that treat blood-related cancers, were down more than 20% at one point in early trading today after the company announced the pricing details of its just-announced convertible preferred share offering.

So what: The company will be raising about $50 million from this offering, before deducting expenses, by selling 50,000 shares of preferred stock at a price of $1,000 per share. While that number sounds impressive, each share of preferred stock can be later converted into 800 shares of the company's common stock, so the actual price of this offering is a disappointing $1.25 per share. That price is a huge discount to the $1.68 that shares closed at last night, and also compares poorly to the the $1.57 that it was able to grab just last month when it sold $15.7 million worth of its common stock

In total, this offering could add another 40 million shares outstanding. Given the huge dilution at a discounted share price, investors sold off shares today.

CTI stated that it plans to use the proceeds of this offering to ramp up commercialization efforts to support a potential lunch of pacritinib, its oral tyrosine kinase inhibitor that is being studied as a treatment for myelofibrosis. Pacritinib is expected to be submitted for regulatory approval in the fourth quarter of this year.

Now what: CTI has been a horrendously bad investment for years now, and its long-term investors have had to deal with many dilutive offerings over the years. The company's share count has risen more than 550% in the last 5 years alone, and thats not even including today's offering news!

CTIC Average Diluted Shares Outstanding (Annual) Chart

While the company's stock got some love earlier in the year after it and its partner Baxter International presented some promising Phase 3 clinical data for pacritinib, given CTI's long history of dilutive share offerings, this investor is going to stay far away from the company's shares until it proves that it can generate a profit on its own.