Companies and shareholders raised nearly US$46bil in the first three months of 2024 via sales of new and existing shares, excluding initial public offerings. — Bloomberg
NEW YORK: Data-centre real estate investment trust Digital Realty Trust Inc sold US$1.5bil of stock in the largest sale of new shares by a public company in the US since March, as Corporate America and many of its biggest investors resume the heady pace set in the first quarter.
Companies and shareholders raised nearly US$46bil in the first three months of 2024 via sales of new and existing shares, excluding initial public offerings (IPOs), data compiled by Bloomberg show.
That’s the busiest stretch since the third quarter of 2021, and as the earnings-season pause comes to a close, observers are expecting more deals following that playbook.
“The follow-on and block market has been very healthy and we expect that to continue with earnings moving past,” said Evan Riley, head of equity capital markets Americas at BNP Paribas SA. “You have companies coming out of the blackout periods, so the secondary activity will take up the bulk of the near-term calendar.”
Roughly US$52bil has been raised this year to date through US sales of new and existing shares separate from IPOs, on pace to return to pre-pandemic norms around the US$150bil mark.
The increase joins a broader strengthening in equity capital markets activity, including US IPO market volume rising by about 65% in the year to date compared to the same period in 2023, according to data compiled by Bloomberg.
With the calendar for company debuts in wait-and-see mode following sizeable deals like Viking Holdings Ltd’s US$1.8bil IPO, bankers anticipate follow-on share sales, block trades and convertible debt will make up the bulk of activity in the coming weeks.
Companies tap investors by selling new shares in order to bolster their balance sheets with much-needed cash, while long-time holders can capitalise on rallies to sell down stakes.
Digital Realty capitalised on a nearly 50% rally in its shares over the year prior to the sale.
Its quarterly results last week powered the stock to its best day in about six months, setting the stage for the sale of about 10.5 million new shares.
The deal comes after the typical lull seen in April, a quiet period for share sales because of restrictions around quarterly results.
Listed companies raised just US$4.64bil during the month, data compiled by Bloomberg show.
Digital Realty is the second-largest US sale of new shares this year by a publicly traded company, coming in behind artificial intelligence-stock darling Super Micro Computer Inc which raised US$1.75bil after a nearly 1,000% share price boom over a 12-month stretch. — Bloomberg
