The UniCredit rights issue is turning into a white-knuckle ride.

Shares in the Italian banking giant have fallen almost 40% since it announced the terms of a heavily discounted rights issue on Wednesday. On a fully diluted basis, after accounting for the capital increase, the post-rights share price has now fallen to €2.61, now just 26% above the subscription price of €1.93. That compares with 43% three days ago, heightening fears that the deal's underwriters will be left holding a chunk of the €7.5bn of new stock - and raising doubts about the ability of other eurozone banks to raise capital.