One under-reported trend on Wall Street this year: Companies are increasingly trying to raise capital by selling more of their own stock. Aside from IPOs, companies have raised $160.34 billion by selling stock as of September 21, which is the highest of any similar period on record. This year’s figure is 19 percent higher than last year’s pace.
Many companies have been selling shares to finance mergers. For example, Actavis raised $4.2 billion in February to help fund its purchase of Botox-maker Allergan. American Tower raised $2.5 billion by selling stock to help pay for its purchase of cell phone towers from Verizon Communications Inc. Endo International raised $2.3 billion to help fund its acquisition of Par Pharmaceutical.
But sometimes it's a desperation move. Copper mining giant Freeport-McMoran announced last Friday that it had raised $1 billion after selling 96.7 million shares of common stock, and may raise another $1 billion in the coming months. But in the global commodity slowdown, the company’s stock is down 68 percent over the past year, and fell 3 percent on Friday after the sale was announced.