Shares of Whiting Petroleum Corp. fell 21% in premarket trade Tuesday after the company's announcement of share sales prompted a SIG Susquehanna Financial analyst to cut his price target on the stock to $37 just a week after axing its rating to neutral. This comes a day after the company issued $2 billion in debt and 35 million shares of equity in a move SIG analyst Biju Perincheril said will increase its share count by 25% and lead to stock dilution. The company appears to have taken advantage of a media report from earlier this month that said the company was exploring a possible acquisition, said Oppenheimer analyst Robert Du Boff in a note to clients. As of Monday's close, shares of Whiting Petroleum had been up 12% over a three-month period. Both analysts said the debt offering likely signals that any potential acquisition is now off the table. Still, Du Boff reiterated an outperform rating on the stock, saying the offering will bolster the company's balance sheet and enable it to capitalize on its Bakken position. The equity sale will help pay down its revolver and fund any cash flow short fall over the next several years, he said.
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