Kodiak Gas Services, Inc. (KGS) experienced a significant after-hours plunge of 5.25% on Wednesday, following the announcement of a major equity offering.

The energy infrastructure provider commenced an underwritten public offering of $750 million of its common stock. Underwriters were also granted a 30-day option to purchase up to an additional $112.5 million worth of shares. The net proceeds from the offering are intended for general corporate purposes, which include repaying part of the company's outstanding borrowings and potentially funding growth capital for additional power generation equipment.

Such large public offerings often lead to immediate selling pressure as the market anticipates dilution of existing shareholders' equity, which explains the sharp decline in the stock price during the after-hours session.