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AirTran Holdings


was trading sharply lower on increased volume Wednesday after announcing a follow-on offering of 9 million shares.

Late Tuesday, AirTran said it will sell 9 million shares of common stock with net proceeds to be used for "general corporate purposes." The low-cost carrier also said it will sell $75 million in convertible senior notes due 2016.

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AirTran shares were falling sharply, down $1.06, or 17.3%, to $5.08. Earlier in the session, the stock touched an intraday low of $4.95. More than 11.3 million shares changed hands by 2 p.m. Wednesday, compared to the stock's three-month average daily volume of 2.1 million, according to the Yahoo! Finance.

Some investors posted on Internet message boards that they were angry over the 10% dilution of their shares, noting that news of the common stock offering and senior note sale came right as AirTran scheduled its next earnings release.

More bearish investors argued the common stock sale is smoke behind the fire, noting that AirTran's management insisted the company would make money in every quarter of 2009. They added that the company shouldn't be raising money for general corporate purposes unless it absolutely needed to.

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-- Written by Robert Holmes in New York