What happened Shares of the Hong Kong-based digital broker and wealth management platform Futu Holdings (NASDAQ: FUTU) fell more than 23% today after the company announced that it plans to issue new shares. So what Futu announced the offering of 9.5 million American depositary shares, each representing eight Class A ordinary shares of the company. Citing an anonymous source, The South China Morning Post reported that Futu is seeking to raise $1.9 billion. Image source: Getty Images. Futu plans to use the cash from the offering for general corporate purposes, including its margin financing business, international expansion, new license applications, potential investment and acquisition opportunities, and other purposes. It is common for shares of a company to drop following a new issuance because new shares dilute existing shareholders, and essentially result in profits being split over more total shares. Now what The new raise is the second Futu has done within the last eight months. The company is coming off a strong quarter of earnings in the fourth quarter of 2020 in which it beat analysts' expectations on profits and total revenue. But the stock has also exploded over the last year, from just above $10 per share in April of 2020 to trading for more than $136 now, so a drop in share price is not unexpected. 10 stocks we like better than Futu Holdings LtdWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Futu Holdings Ltd wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source