Bahama Times

Saturday, Apr 01, 2023

U.S. companies and their backers seize on window to sell stock

U.S. companies and their backers seize on window to sell stock

Sales of shares in publicly listed U.S. companies had their strongest showing last week in more than a year, as companies and some of their shareholders, such as private equity firms, capitalized on the risk appetite of stock market investors.
Stock sales reached $4.97 billion in the United States last week, the highest tally since the second week in 2022, according to data provider Dealogic. Globally, stock sales reached $12.3 billion, the most in more than 30 weeks.

Investment bankers and lawyers say companies are seeing strong demand for their stock from investors who believe now is the time to place big bets on the market recovering in the wake of the Federal Reserve raising interest rates to fight inflation. It's a risky proposition, so companies and their backers are seizing on the opportunity for fear it may soon slip away.

"Equity markets have regained some momentum and volatility has decreased, driving animal spirits on the buy side," said Santiago Gilfond, co-head of Americas equity capital markets at Credit Suisse Group AG (CSGN.S). He added that the sellers of stock have moderated their valuation expectations, helping to lure buyers.

Last week saw 18 so-called secondary stock sales in the U.S., including a $1.7 billion divestment by utility company American Water Works Co Inc (AWK.N), the fifth largest U.S. stock sale since beginning of 2022.

In another notable transaction last week, Oreo cookie maker Mondelez International Inc (MDLZ.O) offloaded about a $1 billion stake in beverage firm Keurig Dr Pepper Inc(KDP.O) in an unregistered stock sale, according to a securities filing.

Private equity firms are getting a piece of the action. Blackstone Inc (BX.N) last week sold a roughly $270 million stake in dating app Bumble Inc (BMBL.O) along with about $220 million position in human resources benefits platform Alight Inc (ALIT.N), and this week, Providence Equity Partners sold a $333 million stake in software provider DoubleVerify Holdings Inc (DV.N).

The surge in activity has been welcomed by bankers and lawyers working on these offerings. Collectively they executed $72.5 billion worth of stock sales for public companies in 2022, the lowest level since 1996 and a 67% drop from 2021's deal bonanza, according to Dealogic data.

"Investors are willing to put money to work in a way that they weren't a year ago," said Michael Kaplan, a capital markets partner at law firm Davis Polk.

The next frontier for equity capital markets, bankers and lawyers say, are initial public offerings (IPOs), which have been subdued since Russia's invasion of Ukraine in February 2022. Unlike secondary stock sales, IPOs take at least a few days to market to investors, and several months to prepare, so companies can't be as nimble in pursuing them when the market becomes welcoming.

A busy week for initial public offerings in early February offered some hope to stock market hopefuls, but advisors remain cautious as stocks sold off in recent weeks.
Newsletter

Related Articles

Bahama Times
Close
0:00
0:00
Don’t Dismiss China’s Peacemaking Bid
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
Nashville style execution
“We've had evidence prior to the pandemic that masks were largely ineffective at preventing community transmission of influenza “
Former Starbucks CEO Howard Schultz:
Former Starbucks CEO Howard Schultz rejects being labeled a "billionaire"
Jamie Dimon is being deposed over JPMorgan Chase role in Epstein lawsuits
Brand new security footage has just been released to the public showing the Active shooter Audrey Elizabeth Hale drove to Covenant Church School in her Honda Fit this morning, parked, and shot her way into the building
AMERICA, 2023
U.S. charges FTX's Bankman-Fried with paying $40 million bribe
Fallen 'Crypto King' Who Owes Millions to Investors Was Kidnapped and Tortured
Regulators blame social media for SVB's rapid collapse: 'Complete game changer'
AOC explains why she opposes banning TikTok
UK: Humza Yousaf replaces Nicola Sturgeon as SNP leader and first minister in Scotland
In a dramatic U-turn against His Government: Judicial Reform Legislation Must Be Halted, Says Israeli Defense Minister Yoav Gallant
Gordon Moore, a co-founder of Intel Corporation, died at 94
Powell: Silicon Valley Bank was an 'outlier'
Donald Trump arrested – Twitter goes wild with doctored pictures
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Home Secretary Suella Braverman tours potential migrant housing in Rwanda as asylum deal remains mired in legal challenges
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
Credit Suisse to borrow $54 billion from Swiss central bank
Russian Hackers Preparing New Cyber Assault Against Ukraine
Jeremy Hunt insists his Budget will get young parents and over-50s back into work
If this was in Tehran, Moscow or Hong Kong
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
Mexican President Claims Mexico is Safer than the U.S.
A brief banking situation report
Lady bites police officer and gets instantly reaction
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
Silicon Valley Bank exec was Lehman Brothers CFO
In a potential last-ditch effort, HSBC is considering a rescue deal to save Silicon Valley Bank UK from insolvency
BBC Director General, Tim Davie, has apologized, but not resigned, yet, following the disruption of sports programmes over the weekend
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
Senator Tom Cotton: If the Mexican Government Won’t Stop Cartels from Killing Americans, Then U.S. Government Should
Banking regulators close SVB, the largest bank failure since the financial crisis
The unelected UK Prime Minister Rishi Sunak, an immigrant himself, defends new controversial crackdown on illegal migration
Man’s penis amputated by mistake after he’s wrongly diagnosed with a tumour
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Is Gold the Ultimate Safe Haven Asset in Times of Uncertainty?
Spain officials quit over trains that were too wide for tunnels...
×