CB Richard Ellis Group Inc. shares plunged 24 percent Tuesday after the struggling commercial real estate services giant said it plans to offer 50 million shares of common stock in a public offering.
If shares were sold at Monday's closing, the offering would be worth almost $305 million. However, if sold at Tuesday close the offering would be worth only $230 million.
The share price drop reflects concerns the sale would dilute the holdings of current investors, whose stakes already have taken an 83 percent hit over the past 52 weeks. The company said it plans to use the offering's net proceeds for general corporate purposes.
CB Richard Ellis earlier sought to raise about $300 million to $400 million from private investors, but abandoned that effort due to lack of interest, according to analysts. The company still has substantial debt from its $1.9 billion acquisition of Trammell Crow Co. in late 2006.
Shares closed down $1.50 to $4.60 on the New York Stock Exchange. Shares closed at $6.09 on Monday.
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