More than a third of Billabong's share value has been wiped out as investors baulked at a $225 million capital raising and a big earnings downgrade.
Shares in the troubled surfwear retailer plunged 36 per cent to 93 cents after coming out of a trading halt on Monday.
That's well below the company's offer of $1.02 per share in its capital raising announced last week.
And its a long way below Billabong's all-time peak of $13.64 reached on June 30, 2007.
Billabong shares went into a trading halt last Thursday as the company launched a $225 million capital raising to help reduce its $325 million debt pile.
The capital raising came just months after the Billabong board knocked back a $3.30-a-share takeover offer.
Eligible shareholders can now buy six new ordinary shares for every seven existing Billabong shares at a price of $1.02 per share.
On Monday, Billabong said it had completed the institutional component of its accelerated pro-rata renounceable entitlement offer and had raised about $155 million, or 79 per cent of the new shares available.
The retail component of the offer will take place from Friday under the same terms.
As it detailed the capital raising last week, Billabong also announced another profit warning.
It now expects underlying earnings, which exclude one-off costs from the restructure, to be $130 million to $135 million for the year to June 30.
That's down from its forecast of earnings slightly above $157 million when it announced plans for a major restructure in February.
Analysts said uncertainty around store closures, cash restructuring charges and excess inventory had prompted the share sell off on Monday.
In a note to clients, Commonwealth Bank analysts said they had made substantial downgrades to their forecasts following the heavily dilutive share offer.
CBA analyst Jordan Rogers said while the balance sheet provided a bit more time, investors would need to be convinced about guidance for fiscal 2013.
"If Billabong management get the strategy right and execute to design, the recovery potential in this stock would be extraordinary, but so are the odds of achieving this outcome so late in the day," Mr Rogers said.
"The capital raising gives some time, but the next six months will be crucial for the business."
Billabong shares were 51 cents lower at 94.5 cents at 1226 AEST.