The CSL Limited (ASX: CSL) share price has dived about 12% since the start of December. On Friday, the global biotech's shares finished the session down 0.33% to $272.10 apiece.
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What's weighing down CSL shares?
A few factors have had a negative impact on the CSL share price, prompting investors to hit the sell button.
Firstly, the rapid spread of the COVID-19 omicron variant has spooked the market since its discovery on 24 November. The S&P/ASX 200 Index (ASX: XJO) sunk to a low of 7,168 points on 2 December, before slightly recovering. On Friday, the benchmark index finished trading at 7,304 points, up 0.1% for the day.
One of the main challenges CSL has faced during the pandemic is a reduction in its plasma collections due to lockdowns. Australia is currently facing a surge in COVID-19 cases, particularly in New South Wales and Victoria.
In addition, the company announced an institutional placement this week to raise $6.3 billion to purchase Vifor Pharma. To put this in perspective, this is Australia's second largest equity raise, behind Telstra Corporation Ltd (ASX: TLS). It's also the world's seventh-largest equity raise for 2021.
The placement price of $273.00 per share would see about 23.1 million new CSL shares brought onto the company's registry. CSL also revealed it would launch a $750 million share purchase plan, offering the same terms to retail investors.
When CSL shares came out of a trading halt on Thursday, investors dumped them and the share price fell by 8.16%. This was the company's biggest one-day decline since the beginning of the pandemic in March 2020.
With more shares being added to the company's books, this will inevitably dilute shareholder value.
The CSL share price could be an attractive buy for the medium-term. Analysts at Morgans raised their price target by 3.2% to $334.70 on Thursday. Based on CSL's last closing price, this represents an upside of 23%.
CSL share price summary
Over the course of the past 12 months, CSL shares have taken investors on a rollercoaster ride, down 5.5%. Over the year, the shares have traded between $242 and $319.78.
On valuation grounds, CSL is the second largest company on the ASX with a market capitalisation of roughly $124.44 billion.
