U.S. Stock Sales Roar Back With $20 Billion Blockbuster Week
(Bloomberg) -- The U.S. equity capital market is wrapping up its biggest week in more than a year, with corporate issuers and their shareholders taking advantage of unabated demand for stocks to offer more than $20 billion of shares.
A selling spree in shares of firms including State Street Corp., T-Mobile US Inc. and VICI Properties Inc. came by way of two dozen secondary offerings, according to data compiled by Bloomberg. The deals also included a $6.3 billion transaction by e-commerce and digital finance company Sea Ltd., the largest stock offering of the year.
With earnings season and a traditional vacation period in the U.S. equity capital markets both out of the way, companies and private-equity holders have started to turn their focus toward potential changes in tax policy that could make it more expensive to sell shares later.
“It’s somewhat dependent on what ultimately gets passed in the spending bill,” Bloomberg Intelligence analyst Gina Martin Adams said in an interview. “The potential for a simple increase in the corporate tax rate may also incentivize some companies to perform around that.”
U.S. stocks fell this week on a sour note amid concerns about the economic recovery, but major indexes are still near all-time highs after multiple records this year. Against that backdrop, companies and shareholders offered the most cash since the week of June 22, 2020 for the third-biggest week of such sales since 2012.
The bulk of this week’s windfall comes from more than $16 billion of traditional secondary offerings in stocks like State Street and Sea. It’s also comprised of at least $1.7 billion of unregistered block trades including T-Mobile and and Warner Music Group Corp., plus $2.6 billion of newly announced at-the-market offerings in firms like Nio Inc. Offerings from Sea and Nio -- the later targeting the most cash from a China-based company since Didi Global Inc.’s IPO in June -- mark a return of cross-borders deals.
Investors are rewarding the moves, with stocks sold in this week’s secondary offerings up by an average of 3.7% during the next session, according to data compiled by Bloomberg.
While this week’s action focused on secondary offerings, the calendar for initial public offerings is also filling up. At least $3 billion of proceeds are expected from listings scheduled for next week, Bloomberg data shows.
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