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Why Flight Centre, Metcash, Reece, & Southern Cross Media are sinking lower

In afternoon trade the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and dropped lower. At the time of writing the benchmark index is down 0.5% to 5,258.3 points.

Four shares that have fallen more than most today are listed below. Here’s why they are sinking lower:

The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 2.5% to $9.65. This morning the travel agent returned from its suspension following the completion of its institutional placement and entitlement offer. It raised a total of $562 million at $7.20 per new share. Flight Centre raised the funds to see it through the tough trading conditions caused by the coronavirus crisis.

The Metcash Limited (ASX: MTS) share price has dropped 10% to $2.68. This decline appears to have been triggered by a broker note out of Morgan Stanley this morning. According to the note, the broker has downgraded Metcash’s shares to an equal-weight rating and trimmed the price target on them to $2.90. It made the move largely on valuation grounds after a strong gain.

The Reece Ltd (ASX: REH) share price has fallen 5% to $8.26. This follows the successful completion of its institutional placement and entitlement offer. The plumbing parts company raised approximately $600 million at a discount of $7.60 per new share. The company will now push ahead with its retail entitlement offer which is aiming to raise a further $190 million. These funds will be used to strengthen its balance sheet.

The Southern Cross Media Group Ltd (ASX: SXL) share price has crashed 23% lower to 12.7 cents. This follows the successful completion of a highly dilutive $149 million institutional placement and entitlement offer by the media company. Southern Cross Media raised the funds at a lowly 9 cents per share. This is a long way from its 52-week high of $1.43.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.