Kodiak Gas Services, Inc. (KGS) saw its shares drop 5.14% in pre-market trading on Thursday.

The decline comes after the company announced and priced a substantial public offering of common stock. Kodiak Gas Services commenced an underwritten public offering of $750 million of its common stock, with underwriters granted a 30-day option to purchase up to an additional $112.5 million worth of shares. The company later priced the offering of 10,563,380 shares at $71.00 per share.

Such large equity offerings typically create selling pressure as investors anticipate dilution of existing shareholders' equity. The net proceeds from the offering are intended for general corporate purposes, including repayment of borrowings and potentially funding growth capital for additional power generation equipment.