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US companies sold stock at the fastest rate ever in May as markets rallied

Carmen Reinicke   

US companies sold stock at the fastest rate ever in May as markets rallied

Publicly traded companies in the US sold shares in the fastest clip ever in May, as the market rebounded from the coronavirus-induced meltdown.

US public companies sold $65.3 billion of new shares in May, the highest on record, Reuters reported, citing Refinitiv data. That's a jump from April, when issuance was $22.3 billion, and March, when it dipped to $4.8 billion, the lowest month since December 2018.

It also brings the 2020 total to more than $120 billion, the highest since 2015, according to the report.

The market meltdown in March foiled companies' ability to issue new shares and raise cash. But, as markets have rebounded, companies are rushing back — the S&P 500 index has gained roughly 40% from March lows and is about 10% away from the all-time high it hit in February.

Read more: GOLDMAN SACHS: Buy these 25 beaten-down stocks all poised to jump more than 18% from current levels

Companies such as Southwest Airlines and Carnival Corp, a cruise line operator, issued new shares in May to raise money, according to the report. Others, such as BlackRock and Regeneron Pharmaceuticals, cashed out some of their stock amid the rally, Reuters reported.

Companies are exercising what options they have to raise money as they don't know what lies ahead in uncertain markets.

The new share issuances mirror the US debt market, where companies have raised more than $1 trillion so far this year, according to the report.

Read more: Equity is the new debt, with Corporate America selling record amounts of stock to stockpile cash. Here's what prompted the sudden shift.

Read the original article on Business Insider

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