Linc Energy saw its share price plummet by 15 per cent after announcing it is planning to develop oil and gas assets.
The firm revealed it will raise the $200 million (£131 million) through a convertible bond issue.
But investors reacted negatively to the news and stocks dropped by 15 per cent – or 40 cents – in the wake of the announcement by the firm.
IG Markets strategist Evan Lucas explained the drop in the value of the company had been expected, adding: "Linc Energy is also a speculative stock so traders will run away if they see the company looking for more money."
He noted it is probably the case that some "short-selling" was to blame for stocks falling.
Linc's share price is set to open at $2.44 today (March 28th), having closed at $2.67 at the end of trading yesterday. It's 52-week high stands at $3.05.
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