Revlon plans equity rights offering

Revlon is continuing to show signs of improvement: today the company announced plans to pay down $170 million in their debt using cash raised selling off its Bozzano business in Brazil ($63M) and an equity rights offering to current common shareholders ($107M).

Following the announcement, the stock took a 6% dive (from $1.34 to $1.26), presumably fueled by panic from investors who don't understand the meaning of "equity rights offering" and assumed it would dilute the value of their shares.

If the dive had been steeper, I'd have snapped up a load of cheap shares to make a profit on the rebound, when cooler heads prevail. As it stands, I'll earmark some cash for when the rights offering goes through.

Unfortunately, the company also restated, in the same announcement, that it still plans to move forward with a 10-for-1 reverse split of its stock later this month to solidify its position (translation: to keep from being delisted), which suggests that management is nervous about its ability to effect a turn-around, at least in the short run.