The Bank of Queensland Limited (ASX: BOQ) share price is down 6 per cent to $8.12 today after the regional lender returned to trade on the back of a $250 million capital raising.
The bank issued 32.1 million new shares at $7.78 per share to institutional investors in a result it reported was at the "top of the bookbuild range".
After a company raises capital its share price will normally fall in order to reflect the dilutory effect of the capital raising.
In other words due to their being far more shares on issue each share is now worth less in terms of the potential profit attached to it.
Commonly some investors will also sell down their existing holdings after a capital raising to book instant profits, or simply to help find the cash required to originally participate in the raising.
The widespread selling will send shares lower if there are insufficient bidders to meet the offer price.
Bank of Queensland is also facing many of the same headwinds as its big four peers like Westpac Banking Corp (ASX: WBC) or Commonwealth Bank of Australia (ASX: CBA).
