Stock Fire Sales of the Crisis Era Haunt Equity Bulls
- The prospect of a crush of new equity is a potential headache
- The biggest year ever for equity sales came in the last crisis
Source: Bloomberg
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With the biggest buyer all but ejected from the market, the prospect that a torrent of stock sales is about to be unleashed by cash-strapped companies is sowing anxiety for investors who remember the financial crisis.
While things have changed since those days, particularly in credit markets, secondary offerings are popping up among distressed firms, including United Airlines Holdings Inc., which raised $1 billion. Combined with a seize-up in buybacks, it adds to concern about something that many believe has been a major support for the market over the years -- that it’s shrinking.