Stock sales hit record as companies buffer balance sheets

Companies raised a record $190 billion in stock sales in the second quarter as part of their effort to survive the pandemic’s economic impact, a Wall Street Journal report shows. 

“We’re in the face of a very resilient equity market which, combined with economic uncertainty, has led to a period of unprecedented equity issuance,” Jim Cooney, head of Americas equity-capital markets at Bank of America Corp., said in the report.

The wave started in the convertible-bond market. Bond-buying initiativesthe Federal Reserve launched at the start of the pandemic helped fuel the boom.

In May alone, companies raised a record $21 billion as they took advantage of valuations and converted bonds to equity without having to sell shares at lower equities.

Companies also raised capital through large stock sales and, in late May, through a resurgence in IPOs, led by Warner Music Group, ZoomInfo Technologies and Albertsons Cos. The IPOs by Warner and Zoon raised roughly $2 billion and $900 million, respectively, the Journal reported. In June alone, companies raised just over $17 billion. 

CFO Dive. Data from Dealogic, via WSJ.com 

Source: WSJ & CFO Dive (2020)

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