From WSJ: The recent surge in some company stocks is providing finance executives with a sudden window of opportunity to tap new sources of funding. But not all of them are likely to cash in, as it takes time to prepare an equity sale, and businesses risk raising the ire of regulators if the share price crashes after a fundraising round.
Corporate advisers say more companies have asked about how to prepare for a potential equity sale or another fundraising event in recent weeks as stock prices went up.
“Management teams are looking at where the stock is trading and seeing this as a way to infuse capital into their company,” said Hala Elsherbini, senior managing director at Three Part Advisors LLC, an investor relations firm.
Some already have tapped the opportunity. Power Plug Inc., a hydrogen fuel-cell company that saw a roughly eightfold rise in its stock price over the past six months, on Tuesday said it was planning to raise about $1.8 billion by selling stock, about $300 million more than initially planned. AMC Entertainment Holdings Inc. this week raised more than $300 million in an equity sale. On Wednesday, its share price more than tripled.
Individual investors are piling into companies that many once saw as a poor bet. Shares of GameStop Corp. , the videogame company, rose more than 130% Wednesday. Other stocks, including those of BlackBerry Ltd. , Bed Bath & Beyond Inc. and Eastman Kodak Co. also saw big gains Wednesday.