Now that the rally has lasted way longer than most thought it could, the Capital Window has opened wide. Last week the secondary offering parade began, on the heels of the stress test results.
Market commentators have mentioned the fact that new stock is being sold almost indiscriminately by the bankers and syndicates and that issues are being placed so quickly that the roadshows used to promote them are being cancelled.
Now it appears that the window is open for non-financial stocks to raise cash as well.
Last night Ford (F) announced a 300 million share offering, which Reuters called a taunt aimed at Chrysler and GM! Ford will use the money to meet debt obligations and presumably, to churn out some more cars that not enough people want.
Energy producer Anadarko (APC) also announced it would sell 30 million shares, even despite it’s recent commentary about the strength of it’s balance sheet. Maybe it’s going for even strengthier.
I suppose the demand for these offerings can be looked at as a sign of strength, but it would be nice to see a bit more M&A activity to go along with it.
Full Disclosure: I am not taking part in any of the offerings mentioned. I currently manage accounts that are long GM and F. My commentary above is strictly a recap of recent news, it is not an invitation to buy or sell securities nor is it an endorsement or disparagement of any particular investment. See my Terms & Conditions page for a full disclaimer.