US companies are capitalizing on lofty stock prices by selling new shares at the fastest rate in 25 years

AMC stock
  • Publicly listed American companies are rushing to issue new stock.
  • Dealogic data cited by the Wall Street Journal shows the number of “follow-on offerings” at 556 as of August 24, the highest year-to-date level since 1996.
  • The firms that have issued fresh stock include household names like Zoom and smaller meme stocks like Plug Power.
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Publicly listed American companies including meme-stock favorites GameStop and AMC are rushing to issue new stock, cashing in on rich valuations, according to a Wall Street Journal report.

Dealogic data cited by the Journal shows follow-on offerings – that is, new stock sale by listed firms – at 556 as of August 24, the highest year-to-date level since 1996. In terms of value, those share offerings were worth a combined $75 billion, the highest ever and up 70% since last year.

On top of GameStop and AMC, which have watched their share prices explode this year, the 556 firms that have issued fresh stock include household names like Zoom and smaller meme stocks like Plug Power. The group of companies runs the gamut in terms of underlying financials, from pandemic winner Zoom to never-profitable Plug.

“People started to take advantage of the incredible run-up in the market,” Josh Weismer, head of US equity at Mizuho Americas, told the Journal. “I think we’re definitely going to continue to see the follow-on market busy.”

In April, before its share price took off, AMC issued 43 million shares, worth roughly $500 million at April 27 prices, though the shares were not sold all at once. Then in June, it issued another 11.6 million, right as the stock price was peaking, raising $587 million in a three-hour sale that was quickly lapped up.

“Our current market prices reflect market and trading dynamics unrelated to our underlying business,” the theater chain said in an SEC filing in June. “We caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.”

Still, eager to cash in on its unprecedented valuation, AMC proposed issuing 25 million additional shares and said it would put the decision to a shareholder vote. It backed away from the vote just weeks later, following backlash from the company’s devoted retail-trader base.

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BioNTech rallies 16% after boosting the sales forecast for its COVID-19 vaccine and projecting sturdy demand ahead

BioNTech CEO Ugur Sahin
  • BioNTech shares surged as much as 16% on Monday after the company reported bumper second-quarter earnings and upped projections for vaccine demand.
  • Second-quarter revenue came in 127 times larger than the same period in 2020. The company went from losing money in Q2 last year to turning a €2.8 billion profit this year.
  • BioNTech also said it expects to reap €15.9 billion in revenue from vaccine delivery. That is up from an earlier forecast in May of €12.4 billion.
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Shares in BioNTech surged as much as 16% on Monday as the German biotech company reported bumper second-quarter earnings and upped projections for vaccine demand.

The stock climbed as high as $452 – an all-time high – as investors digested the good news. BioNTech has been on a tear in recent weeks, buoyed by the resurgent Delta variant and global vaccine demand for the Pfizer-BioNTech jab.

“To address the ongoing pandemic, we are expanding the supply of our COVID-19 vaccine to more than 100 countries and regions worldwide,” BioNTech CEO Uğur Şahin said in a statement.

BioNTech’s explosive growth during the pandemic has led to eye-popping earnings numbers. Revenues in the second quarter came in 127 times larger than the same period in 2020. The company went from losing money in Q2 last year to turning a €2.8 billion profit this year.

The company announced it had signed contracts for more than 2.2 billion doses of its vaccine this year, and said it expects to reap €15.9 billion in revenue from vaccine delivery. That is up from an earlier forecast in May of €12.4 billion.

Vaccine demand is likely to persist well into next year, the company said, with more than a billion doses still left to be delivered in 2022 and beyond.

Emerging markets and frontier economies have been significantly slower to vaccinate than advanced economies, in part because of insufficient supply. While 30% of the world has got at least one dose of a COVID-19 vaccine, that number is only 1% for low-income nations.

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Clorox tumbles 12% as the company misses on earnings and projects a post-pandemic decline in demand for cleaning supplies

Clorox wipes
  • Clorox fell as much as 12.1% on Tuesday after the company reported a steep earnings miss and lowered guidance.
  • Sales for the company’s most recent fiscal quarter came in at $1.8 billion, well below sales a year prior and $100 million short of analyst expectations.
  • With the pandemic subsiding, Clorox expects both sales and earnings per share to fall as consumers pull back on buying cleaning supplies.
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Clorox fell as much as 12.1% on Tuesday after the company reported a steep earnings miss and revised down its guidance amid a post-pandemic decline in demand for cleaning supplies.

The stock fell briefly below $160 before paring back some of its losses later in the day. Clorox had been trading near $180 on Monday before the pre-market earnings announcement.

“As we head into fiscal year 2022, we’re laser focused on operational execution, rebuilding our margins, and driving market share improvements in this dynamic environment,” CEO Linda Rendle said in a statement.

Sales for the company’s most recent fiscal quarter came in at $1.8 billion, well below sales a year prior and $100 million short of analyst expectations. Adjusted earnings per share were at 95 cents, versus an expected $1.32.

The weak quarterly performance was accompanied by pessimistic guidance for the coming fiscal years. With the pandemic subsiding, Clorox expects both sales and EPS to fall as consumers pull back on buying cleaning supplies.

Still, the company announced $500 million over five years in fresh investment, with a focus on building out its digital channels and cutting costs. Clorox has nearly doubled its e-commerce business in the last two years, though it is still in the early stages, Rendle said.

Clorox closed at $164.30 on Tuesday, down 9.3% on the day.

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Virgin Galactic drops 17% as announcement of $500 million share sale outweighs successful space flight

richard branson with spaceshiptwo space plane
Richard Branson poses with the new SpaceShipTwo, a six-passenger two-pilot vehicle meant to ferry people into space, in Mojave, California,February 19, 2016.

  • Virgin Galactic dropped more than 17% on Monday after announcing a $500 million share sale.
  • The company successfully completed a space flight with founder Richard Branson over the weekend.
  • Branson thereby beat rival entrepreneurs Jeff Bezos and Elon Musk to be the first billionaire to reach space.
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Shares of Virgin Galactic sank by more than 17% on Monday as the company announced a large share sale after completing a successful space test flight with founder Richard Branson on board over the weekend.

A filing with the Securities and Exchange Commission showed the space company was conducting a $500 million share offering. The shares finished the session with a loss of 17.7% at $40.51.

The news comes on the heels of a major development on Sunday, when Virgin Galactic flew a full crew – including founder Richard Branson – to the edge of outer space in its VSS Unity spacecraft, which reached 55 miles above sea level.

Last week, UBS analyst Myles Walton downgraded Virgin Galactic to “neutral” as he believed the majority of optimism around achieving space travel was already considered in the current stock price and it could therefore not skyrocket further. The company has soared almost 200% since mid-May.

With the successful space flight, Branson beat fellow space company founder Jeff Bezos into space by just over a week – the Blue Origin founder is due to fly on July 20 on the New Shepard rocket. Blue Origin’s CEO Bob Smith had played this down earlier in the month, saying that Bezos’ flight would go higher than Branson’s and break through the Kármán line – a heavily contested, imaginary boundary used by some space experts to determine the end of Earth’s atmosphere and beginning of outer space.

Virgin Galactic secured approval from the Federal Aviation Administration to fly customers into space last month, becoming the first company to do so. Over 600 customers are waiting for a spaceflight, including billionaire and CEO of space technology company SpaceX, Elon Musk. Tickets for space flights with Virgin Galactic cost $250,000.

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Virgin Galactic drops as much as 15% after the company announced a $500 million share sale

richard branson with spaceshiptwo space plane
Richard Branson poses with the new SpaceShipTwo, a six-passenger two-pilot vehicle meant to ferry people into space, in Mojave, California,February 19, 2016.

  • Virgin Galactic dropped by as much as 15% on Monday after announcing a $500 million share sale.
  • The company successfully completed a space flight with founder Richard Branson over the weekend.
  • Branson thereby beat rival entrepreneurs Jeff Bezos and Elon Musk to be the first billionaire to reach space.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Virgin Galactic dropped by as much as 15% on Monday as the company announced a large share sale after completing a successful space test flight with founder Richard Branson on board over the weekend.

A filing with the Securities and Exchange Commission showed the space company was conducting a $500 million share sale. Virgin Galatic shares were last at $41.98, down 14.67% at 12:26 pm E.T.. They hit an intraday low of $41.70 at one point.

On Sunday, Virgin Galactic flew a full crew, including founder Richard Branson, to the edge of outer space in its VSS Unity spacecraft, which reached 55 miles above sea level.

Last week, UBS analyst Myles Walton downgraded Virgin Galactic to “neutral” as he believed the majority of optimism around achieving space travel was already considered in the current stock price and it could therefore not skyrocket further. The company has soared almost 200% since mid-May.

With the successful space flight, Branson beat fellow space company founder Jeff Bezos into space by just over a week – the Blue Origin founder is due to fly on July 20 on the New Shepard rocket. Blue Origin’s CEO Bob Smith had played this down earlier in the month, saying that Bezos’ flight would go higher than Branson’s and break through the Kármán line – a heavily contested, imaginary boundary used by some space experts to determine the end of Earth’s atmosphere and beginning of outer space.

Virgin Galactic secured approval from the Federal Aviation Administration to fly customers into space last month, becoming the first company to do so. Over 600 customers are waiting for a spaceflight, including billionaire and CEO of space technology company SpaceX, Elon Musk. Tickets for space flights with Virgin Galactic cost $250,000.

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Virgin Galactic rises as much as 9% in premarket trading after Richard Branson’s successful space flight

richard branson with spaceshiptwo space plane
Richard Branson poses with the new SpaceShipTwo, a six-passenger two-pilot vehicle meant to ferry people into space, in Mojave, California,February 19, 2016.

Shares of Virgin Galactic rose by as much as 9% in pre-market trading on Monday after the space company completed a successful space test flight with founder Richard Branson on board over the weekend.

This was the first time Virgin Galactic flew a full crew to the edge of outer space in its VSS Unity spacecraft, which reached 55 miles above sea level.

In pre-market trading on Monday, shares of Virgin Galactic were last at $53.08, up 7.89% at 7:13 am E.T., after having closed 6.62% lower at $49.20 after Friday’s regular session.

Last week, UBS analyst Myles Walton downgraded Virgin Galactic to “neutral” as he believed the majority of optimism around achieving space travel was already considered in the current stock price and it could therefore not skyrocket further. The company has soared almost 200% since mid-May.

With the successful space flight, Branson beat fellow space company founder Jeff Bezos into space by just over a week – the Blue Origin founder is due to fly on July 20 on the New Shepard rocket. Blue Origin’s CEO Bob Smith had played this down earlier in the month, saying that Bezos’ flight would go higher than Branson’s and break through the Kármán line – a heavily contested, imaginary boundary used by some space experts to determine the end of Earth’s atmosphere and beginning of outer space.

Virgin Galactic secured approval from the Federal Aviation Administration to fly customers into space last month, becoming the first company to do so. Over 600 customers are waiting for a spaceflight, including billionaire and CEO of space technology company SpaceX, Elon Musk. Tickets for space flights with Virgin Galactic cost $250,000.

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Krispy Kreme sinks following a 24% surge on its first day as a public company

Krispy Kreme donuts
  • Krispy Kreme gave up ground Friday morning, following a 24% first-day surge.
  • The stock immediately sank as the market opened, losing 7.6% in the first five minutes of trading before finding a floor.
  • Krispy Kreme’s IPO had initially been targeting the $21-$24 range, before later being revised down.
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Krispy Kreme gave up ground Friday morning, following a 24% first-day surge as the donut dealer went public.

The stock immediately sank as the market opened on Friday, dropping as much as nearly 10% shortly after the opening bell before paring some losses.

Early activity on Thursday saw the newly-public stock sag, opening a bit below the target IPO price of $17. The stock, under the ticker DNUT, recovered throughout a choppy trading day, finishing up 24.2% to close at $21.12.

Krispy Kreme’s IPO had initially been targeting the $21-$24 range, before later being revised down to ultimately price at $17 per share. This means even Thursday’s impressive gains still only put the stock at the lower bound of its original goal. The IPO raised around $500 million, down from initial expectations of $640 million, according to Bloomberg.

Krispy Kreme was trading at $19.65 as of 9:40 a.m. ET on Friday.

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GameStop knows its stock is ‘extremely volatile’ – but leadership says it’s completely out of their control

gamestop store ps5
  • On Thursday, GameStop finally acknowledged the ongoing short squeeze driving its stock price up.
  • GameStop leadership said the stock is “extremely volatile” and out of their control in an SEC filing.
  • The squeeze that began in mid-January has extended into late March, with no signs of stopping.
  • Visit the Business section of Insider for more stories.

GameStop said Tuesday that its stock is -and continues to be – “extremely volatile.”

Moreover, that volatility is “due to numerous circumstances beyond our control.”

The statement in a regulatory filing is the first such statement from GameStop leadership on its ongoing stock price fiasco that’s seen its shares rise as much as 1600% in a matter of weeks.

Under the “risk factors” section of the annual report, the company’s stock volatility is listed as the primary risk factor related to the company’s stock. It specifically cites “short squeezes” as a primary reason for that volatility.

“The market price of our Class A Common Stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control,” GameStop said in the filing.

Gamestop
A 12-month chart of GameStop’s stock value demonstrates the meteoric rises and catastrophic falls of the last few months.

GameStop’s stock value has been explosively unpredictable since mid-January.

Between January 15 and January 27, the price leapt from around $35 to just shy of $350. It’s seen similarly huge dropoffs, but months later it’s still in the $180 range.

The reason, of course, is the much discussed “short squeeze” from a large group of individual investors driving up the company’s stock price in an effort to defeat short sellers betting against the stock. It’s been a major topic of discussion for the past several months for loads of people in media and on Wall Street – except for GameStop leadership.

The company has more or less stayed mum for weeks, and even declined to discuss it on its quarterly earnings call this past week. Instead company leadership focused on the company’s ongoing “transformation” led by Chewy cofounder and former CEO Ryan Cohen.

Since Cohen joined the company’s board in January, taking charge of a “strategic” committee soon after, the company made a string of high-profile hires from the likes of Amazon and Chewy.

It is unclear what Cohen’s specific plans are the future of the company, but he broadly outlined plans in an open letter to the company’s board in late 2020.

GameStop, “needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences,” Cohen wrote in the letter, “not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.”

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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